Cardano has undoubtedly been the winning star of this rally, registering more than 47% weekly earnings at press time. Its native token, ADA, may finally have a monopoly on the market as it moves towards the fourth alternative in the ranking. Better the state, more expectations and greater anticipation, and this was the case for Cardano, since the alt was only 11.00% of its ATH.
However, Cardano’s price trajectory towards the long-awaited $ 5 mark was not invisible, in fact, metrics indicated that ADA was close to achieving the same.
ADA needs to repeat history
The Relative Strength Index, when viewed alongside prices, can be a good indicator of market sentiment as well as investments. In the case of Cardano, its RSI on a weekly chart highlighted the space for ADA to rise. In particular, the weekly RSI had been in the neutral zone since May 17, after that, this is the first time that ADA has reached the overbought zone. Also, Cardano broke the downtrend of the RSI as seen in the chart below, which was a solid indicator of recovery.
The way to $ 5
Dan Gambardello, in a recent video, charted a “clear path to $ 5” for ADA. It charted its RSI trend historically, taking into account the external developments that occur in the ecosystem. Additionally, he pointed out how on a weekly chart at $ 1, when Cardano was overbought in February, it jumped 140% to its ATH. Interestingly, another 140% price increase from current levels will bring ADA to the $ 5 mark.
Even though ADA was not in the same overbought territory as it was at $ 1, it was in the green box signifying Alonzo’s hard fork period. During Mary and Shelly’s hard forks too, everyone was looking for profit.
However, ADA has a lot of “upside potential” at the moment, considering its daily and weekly RSI as highlighted by Gambardello. In particular, on August 14, the ADA daily RSI was as high as in February. Therefore, if a similar trend of the RSI were to persist, the path of Cardano to $ 5 could be quick and clear.
The downside won’t be surprising too
When everything looks perfect, it definitely isn’t. In the case of Cardano, one thing did not fit and it was the low trade volumes during this rally. The January and May rallies had considerably higher trade volumes compared to this rally.
Even though ADA was so close to its ATH, volumes were almost 50% lower than recent rallies. The low number of participants meant that the previous running of the bulls had a lot of activity compared to this time.
So while everything else is in favor of the coming ADA rally, it needed more market participants. Also, ADA needed to break out of its consolidation at the $ 2.15 mark for a quick run. In the long term, while ADA will rise and skyrocket up to $ 5, its rise in RSI and market participants will play a key role in it.
This is a machine translation of our English version.
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