Cardano (ADA) is on the verge of a major move as the price consolidates within a symmetrical triangle on the daily chart. This technical setup means that a significant price action is anticipated to happen soon with ADA currently at $0.3469.
Traders are waiting for the price to burst through the resistance level and test the $0.54 level as the next level of resistance.
Symmetrical Triangle Formation Points to Imminent Move
According to ADA’s current chart, a symmetrical triangle is being formed. It is a typical pattern indicating a sideways movement leading to a big price move.
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It is characterized by a series of lower highs and higher lows that form a converging channel. This usually results in a breakout when the price reaches the neck of the channel. Traders are monitoring whether this breakout will occur to the upside or downside.
As we can see from the chart, the price has been slowly approaching the apex of the triangle pattern, which means that the breakout is imminent.
If ADA surges past the upper trendline of the triangle, the price is expected to rise to $0.54. For a bullish scenario to happen, ADA requires strong buying pressure with the volume to back it up.
Key Indicators Show Mixed Signals
Several technical indicators suggest mixed signals regarding ADA’s potential breakout. Currently, the Relative Strength Index (RSI) is at 46.96. That is is neutral, meaning that the market does not have a defined tendency.
This bullish breakout will be confirmed if the RSI moves past the 50-level, signifying that the bulls are in control.
Also, the Bollinger Bands are tightening up, which means that its volatility is decreasing. ADA is currently trading close to the mid-level of Bollinger Bands. The upper band at $0.3969 is a key resistance point.
If price breaks through this level together with a rise in the RSI, this would more likely signal a bullish trend and the potential to reach the $0.54 level.
On-Chain Data Reflects Uncertainty
On-chain data provides further insight into ADA’s market position and reflects uncertainty. Cardano’s network growth is 0.09%.
While the growth is in the right direction, the low growth rate indicates a lack of significant bullish pressure.
The large holder concentration is also slightly lower by 0.53%. This means that some of the big investors are selling their stakes.
However, the “In the Money” metric, which measures the percentage of ADA holders who are in profit, paints a slightly better picture at 3.43%. Whale activity, defined by large transactions, is neutral at -1.40%.
This thus suggests that the large investors’ behavior is not clear in this period. Increased whale activity is likely to cause ADA’s price to rise in the event of a break out of the current trading range.
Social Dominance Could Play a Role in ADA’s Performance
The Cardano’s social dominance, which is the percentage of the ADA community’s engagement and conversation, is standing at 0.491% at the moment. This moderate level of social activity could be deciding factor in the price of coin.
In the past, price gains in the cryptocurrency market are typically followed by an increase in social media mentions and user engagement. If Cardano’s social dominance rises and is combined with a rise in market sentiment and trading volume, it may lead to a breakout.
Nevertheless, with limited growth in social mentions and investment attention, ADA might face difficulties in developing the necessary push to overcome the range boundaries.
Concurrently, Cardano’s founder, Charles Hoskinson, is expected to speak at the upcoming Cardano Summit on October 18th. Consequently, investors will be on the lookout for any new developments or news that may affect the price of ADA as his speech could greatly influence the market perception.
