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Key Insights:
- Cardano price could be ripe for a significant bull run this year.
- Whales have continued accumulating the coin in the past few years.
- ADA has formed a double-bottom pattern, pointing to more gains.
Cardano price crashed into a deep bear market this year and erased billions of dollars in value. ADA shows signs of a potential 120% rally as whale accumulation continues. Open interest is climbing toward the $1 billion mark, signaling strong market interest.
Cardano Price Technicals are Showing Bullish Signs
The daily timeframe chart shows that the ADA price has remained under pressure this year. It has formed a series of lower lows and lower highs, with all recovery attempts facing substantial resistance.
Several bullish indicators hint at a potential rally in ADA. Cardano price could rise toward the November peak of $1.326, about 120% above its current level.
First, the Relative Strength Index (RSI) has moved from the oversold level of 29 in June to 52. It was the first time it has moved above that level since June 2, and it is a sign that it is gaining strength.
Second, the coin has formed a double-bottom pattern, one of the most common bullish reversal patterns. The double-bottom was at $0.519, its lowest level in April and June. On the other hand, the neckline was at $0.859, its May high.
This double-bottom pattern has a height of about 40%. Measuring this distance from the neckline yields an initial target price of $1.20, approximately 96% above the current price.
Third, the spread of the three lines of the Bollinger Bands has continued to narrow in the past few days. The Average True Range (ATR) indicator has continued falling.
Combined, the two indicators mean Cardano’s volatility has dried up recently. This performance often leads to a Bollinger Bands squeeze. Therefore, a contrarian bullish case for the ADA price can be made.
If this happens, it will initially jump to the double-bottom target of $1.200, then hit the last November high of $1.326. A drop below the double-bottom point at $0.519 will invalidate the bullish Cardano price forecast.
Cardano Price Outlook Strengthens as Whale Accumulation Rises
A potential catalyst for the ADA price is that whales continue to accumulate the coin. In most cases, whale accumulation is a sign that investors expect the coin to go further in the long term.
Cardano whales are ramping up accumulation. Santiment reports that holders with 10 to 100 million tokens own more than 13.12 billion ADA. This means that they have bought over 320 million coins since June 16.
Cardano holders with 100 million to 1 billion tokens have grown their positions significantly. Their holdings climbed from 3.02 billion on June 7 to 3.22 billion ADA.
In line with this accumulation, another data point known as age consumed has plunged to 468.9 million. It’s been down from last month’s high of 136 billion.
Age consumed data measures the tokens that have moved multiplied by the time in days since they changed addresses. A low figure indicates that long-term holders are not selling their coins.
ADA Futures Open Interest is Soaring
Meanwhile, there are signs that Cardano’s future open interest is rising gradually. The interest grew to $929 Million and is slowly approaching the key milestone of $1 Billion. A move to $1 Billion will be the first time it has done that since March this year.
Soaring futures open interest is a bullish sign because demand among investors is continuing. A likely reason for this demand is the upcoming Glacier airdrop, in which Cardano holders will receive NIGHT tokens. NIGHT will be a Cardano sidechain focusing on privacy.
Cardano price has been under pressure in the past few months, mirroring the performance of other tokens. This crash coincided with the ongoing fears that Cardano was a ghost chain.
However, there are signs that the ongoing crash is about to end. It has formed a double-bottom pattern, indicating a potential rebound as whales accumulate.
Disclaimer
This article is for informational purposes only and provides no financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.
