Cardano has endured a five-day stagnation period without providing a clear sign for where its price is heading next. Now that ADA sits at a crucial support level, a spike in demand is all that it needs to march towards new all-time highs.
Cardano Primed for Higher Highs
Cardano’s price action has been contained within an ascending parallel channel over the past month.
Each time ADA has risen to this technical formation’s upper boundary since early February, it gets rejected and retraces to the lower edge. From this point, it tends to rebound, consistent with the characteristics of a channel.
Following the recent retest of the channel’s lower trendline, Cardano may be poised for a bullish impulse towards the middle or upper trendline as it has done in the past few weeks.
These interest areas sit at $1.50 and $1.90, respectively.
As long as the underlying support at $1.10 continues to hold, the odds for a rebound to new all-time highs will remain intact.
Strong Support With No Resistance
IntoTheBlock’s “In/Out of the Money Around Price” (IOMAP) model reveals that it will take a significant number of sell orders for Cardano to slice through the $1.10 support. Based on this on-chain metric, nearly 140,000 addresses had previously purchased roughly 5 billion ADA around this price level.
Such a critical demand barrier will likely absorb any downward pressure. Holders within this range might do anything to prevent seeing their investments go “Out of the Money.” They may even buy more tokens, subsequently countering the selling pressure.
Given the significance of the $1.10 support level, only a daily candlestick close below this level would invalidate the bullish outlook. Slicing through this price hurdle will see Cardano dive towards the next important interest area at $0.88.
Here, the IOMAP cohorts show that 136,000 addresses hold 2.80 billion ADA.