Cardano has earned a place as one of the top blockchain networks, often being dubbed an “Ethereum killer” due to its advanced smart contract capabilities. However, as with many cryptocurrencies, ADA has not been immune to market fluctuations.
In 2023, Cardano has faced significant volatility, with its price dropping by approximately 37% year-to-date. Despite this downturn, recent trends have sparked renewed optimism among investors. Over the past seven days, Cardano’s price has risen by 13.40%, signaling the possibility that the altcoin could be on the verge of another major upward trend. For early adopters and long-term holders, this presents a critical question: Is ADA primed for a massive breakout similar to the one seen in late 2020 and early 2021? At the time of writing, ADA is trading at $0.40 on Gate.io.
Historically, Cardano has demonstrated its potential for large price surges, often driven by key technical indicators. With several bullish signals now beginning to emerge, there’s growing speculation that ADA could repeat its prior performance, potentially delivering substantial gains for investors who position themselves early.
In this article, we will dive deeper into the technical factors currently supporting this bullish outlook for Cardano, analyzing key indicators such as Exponential Moving Averages (EMAs), the Market Value to Realized Value (MVRV) ratio, and the Relative Strength Index (RSI). These tools could provide crucial insights into whether ADA is set for a significant price surge in the coming months, with the potential to see gains as high as 600%. We’ll also explore possible price targets for 2024 and discuss the risks that investors should keep in mind as the market develops.
With blockchain adoption continuing to grow and Cardano’s fundamentals remaining strong, is this the moment for ADA to shine once again? Let’s take a closer look at the data and determine if history is about to repeat itself.
Cardano Signals a Strong Buy Opportunity
Looking back at Cardano’s weekly price chart, the cryptocurrency saw a dramatic increase between December 2020 and May 2021, climbing from $0.15 to $1.77 – a remarkable gain of 1041%. A major catalyst for this rally was a bullish signal triggered when the 50-day Exponential Moving Average (EMA) crossed above the 100-day EMA.
The EMA is a common technical analysis tool that assigns more significance to recent prices to help traders spot trends. A bullish signal occurs when a shorter EMA (like the 50-day) crosses above a longer one (such as the 100-day), while the opposite indicates a bearish trend.
In February 2021, Cardano’s 50-day EMA crossed above its 100-day EMA, marking the beginning of its massive surge. Currently, Cardano is trading at $0.39, with its EMA configuration resembling the pattern seen before its previous bull run. This similarity suggests a breakout from the current descending triangle could be on the horizon.
If Cardano’s price can break through this resistance, it may replicate its past performance, with a potential 500% gain over the next six months. Such a rally could bring ADA to a price point of approximately $2.40.
One of the supporting signals comes from the 30-day Market Value to Realized Value (MVRV) ratio. This indicator helps gauge the profitability of an asset and how likely investors are to sell. A high MVRV ratio signals increased profitability and selling pressure, while a low ratio suggests most holders are inclined to hold their positions.
At present, Cardano’s MVRV ratio is sitting at 11.95%, according to Santiment. This level indicates that although some profitability is present, many investors may prefer to hold their tokens, pointing to a broader bullish sentiment.
Interestingly, this current MVRV reading is similar to what was observed in December 2020, just before Cardano’s explosive rally. This adds further support to the idea that ADA could be poised for another significant price increase.
ADA Price Outlook: Rally to $0.70 Possible in 2024
An analysis of the ADA/USD 3-day chart strengthens the bullish perspective. The Relative Strength Index (RSI), a momentum indicator, has recently climbed above the neutral mark, suggesting growing bullish momentum. The RSI measures the speed and change of price movements, and a reading above 50 typically indicates a bullish trend, while a drop below 50 signals bearish momentum.
Currently, Cardano’s price seems to be following a similar trajectory to its previous rise from $0.47 to $0.75 earlier this year. If this momentum continues, ADA could see its price reach $0.70 before the end of 2024.
However, caution is warranted. If the token becomes overbought and buying pressure diminishes, Cardano’s price could fall to as low as $0.27.
Brief History of ADA Price
Cardano (ADA) began trading in October 2017, initially launching at a price of around $0.02 per token. This low starting price marked the early stages of ADA’s journey, and like many cryptocurrencies during that time, it experienced significant volatility. In early 2018, as the broader cryptocurrency market entered a massive bull run, Cardano’s price surged to its then all-time high of approximately $1.33 by January 2018, driven by heightened interest in blockchain technology and speculative investment. However, as the market cooled and the cryptocurrency bubble burst, ADA’s price sharply declined, and by the end of 2018, it had dropped back to under $0.05.
From 2019 to mid-2020, ADA’s price remained relatively stagnant, hovering around the $0.03 to $0.10 range, as the project focused on building out its technology, including the rollout of the Shelley upgrade to decentralize the network. The next major breakout for Cardano came in late 2020 and early 2021, when ADA surged in value during the broader cryptocurrency bull market.
By May 2021, Cardano reached an all-time high of $2.46, buoyed by optimism surrounding the development of its smart contract functionality and the anticipation of its Alonzo upgrade. Later that year, ADA hit a new peak of $3.10 in September 2021, fueled by continued growth in the DeFi ecosystem and institutional interest in the project. The ATH of 2021 was never conquered again but maybe, it is this bull market that puts ADA back up on track.