Cardano’s ADA token has been under significant downward pressure, but crypto analyst Trend Rider suggests there are two potential paths for the asset to reach new highs. This analysis comes as ADA has been one of the worst-performing cryptocurrencies this year, with a year-to-date gain of only 12%.
Two Paths for Cardano’s Price
Trend Rider outlined two scenarios that could influence ADA’s trajectory:
Path A: If Bitcoin holds above $60,000, ADA could surge to $0.60 without experiencing any further declines. This optimistic outlook suggests that a stable Bitcoin price could create a favorable environment for Cardano to rally.
Path B: Conversely, if Bitcoin fails to maintain its price, ADA could drop to a liquidation zone around $0.24 before starting its upward movement. Trend Rider referred to this scenario as a potential crash that could eliminate weak hands, setting the stage for a robust bull run once the price stabilizes.
Currently, Path B appears more likely, especially considering recent analysis suggesting that Bitcoin might slip below $60,000 due to concerning Non-Farm Payroll (NFP) data. Should this happen, ADA is expected to decline significantly alongside Bitcoin.
Current Market Conditions for Cardano
Despite the mixed sentiment in the market, Cardano’s performance has not met expectations this year. After experiencing its first monthly green candle in September, ADA has struggled at the start of October. Analysts highlight that the broader bearish sentiment in the crypto market has contributed to this lackluster performance.
On-chain Metrics Reflect Mixed Sentiment
On-chain data reveals contrasting sentiments among investors. According to IntoTheBlock, large transactions of ADA have increased recently, indicating that crypto whales are actively accumulating the token. In the past 24 hours, whales traded approximately 17.67 billion ADA.
However, the ‘In The Money’ metric paints a bearish picture, showing that only 17.59% of addresses holding ADA are currently profitable. This raises concerns about further downward pressure if the 77.34% of addresses at a loss begin to liquidate their holdings to mitigate losses. The $0.22 level remains critical, as 539,210 addresses purchased 5.42 billion ADA at this price point.
Current Price and Trading Volume
As of now, Cardano’s price is around $0.35, reflecting a 3% increase in the last 24 hours. However, trading volume has decreased significantly, down by over 23%, with $237 million traded during this timeframe.
Conclusion
While the potential for Cardano to reach new highs exists, it is heavily contingent on Bitcoin’s performance and broader market dynamics. The two outlined paths highlight the volatility and uncertainty in the cryptocurrency space, emphasizing the need for investors to closely monitor market trends and sentiment. The upcoming days will be crucial in determining whether Cardano can rally or face further declines.
