Multiple on-chain metrics suggest that Cardano is poised to advance further. Still, ADA must overcome one final resistance barrier before reaching new highs.
Cardano Looks Ready to Recover Lost Ground
Cardano entered a steep corrective period after reaching new yearly highs in late July. The so-called “Ethereum killer” saw its price plummet more than 50% within two months.
It went from trading at a high of $0.155 to a low of $0.0755 on Sept. 22.
The 200-day moving average managed to keep falling prices at bay and served as a rebound zone. Bouncing off this trend-following index led to a 51.5% upswing towards the 100-day moving average in mid-October, which also managed to hold.
As a result, ADA’s monthly price action has been contained between these two barriers since then.
The smart contracts token is currently trying to slice through the overhead resistance to recover some of the lost ground, but doing so will not be easy.
IntoTheBlock’s “In/Out of the Money Around Price” (IOMAP) model reveals that the 100-day moving average represents a significant supply barrier to overcome.
Based on this on-chain metric, more than 20,000 addresses had previously purchased nearly 3.6 billion ADA between $0.107 and $0.112.
Holders within this price range will likely exit some of their underwater positions, putting downward pressure on the uptrend.
Still, if the increase in demand is significant enough, Cardano may slice through this resistance wall and aim for the $0.125-$0.13 hurdle.
This bullish thesis holds when looking at Cardano’s network growth.
Market participants seem to be re-entering the market at a substantial rate, as reflected in the recent spike in new daily addresses. Indeed, more than 8,000 new addresses are joining the network today, representing a 202% jump within the past three days.
The sudden upturn in this on-chain metric suggests an increase in user adoption over time. Network growth is often regarded as one of the most accurate forecasters of price.
When the network expands for a prolonged period, rising prices tend to follow.
Regardless of the optimistic outlook, the high level of greed among market participants is a concern.
If sell orders begin to pile up, the $0.104 support level must hold to prevent compromising the bullish scenario. Failing to do so will likely trigger a sell-off that pushes down ADA to $0.095.