ADA rose by close to 160% in just two months, outperforming Bitcoin, which saw a return of just below 49%, and Ethereum, with a return of nearly 45%. Additionally, Avax and Solana experienced significant increases of 345% and 242%, respectively. The momentum of Cardano and the overall crypto market was fueled by legal victories, optimism surrounding incoming spot ETFs, and the peak of the hiking cycle with expectations of earlier rate cuts.
During this period, treasury yields fell sharply, while commodities such as gold, silver, and copper saw increases along with stock indexes. The market adopted a risk-on mode, and upcoming Bitcoin halving also contributed to the massive surge in the crypto market.
(ADAUSDT Daily Chart)
ADA made significant gains during this two-month surge, outperforming much of the market but falling short compared to counterparts like Avax and Solana. One of the notable aspects for ADA during this surge was the growth of Decentralized Applications (DApps) on the Cardano blockchain, with DApps volume increasing by over 90% in the last 30 days. ADA’s price rose by more than 70% during this period, according to DappRadar data.
However, Cardano’s DApp volume still lags significantly behind Avax and Solana, being nearly 10 times lower, and in comparison to Ethereum, it’s over 400 times lower. Despite the volume increase, primarily driven by Minswap, Cardano may have overextended itself with the latest surge.
From a technical standpoint, the Relative Strength Index (RSI) exhibited a negative divergence, while the Relative Momentum Index (RMI) extended close to 100, indicating that the momentum is still strong and not wavering for the moment. Following the breakout of the massive 0.42 resistance, the current price is testing the next main resistance for the medium term, in the 0.64-0.7725 zone. This zone contains some minor resistances, making it challenging for traders to navigate with a range of nearly 15%. Predicting the next breakout might prove difficult. On the other hand, a correction might be imminent.
(ADAUSDT Daily Chart)
The significant positive for ADA was the robust volume observed during the last month. Looking ahead to 2024, the crypto market appears promising with the anticipation of the Bitcoin halving and easing financial conditions. ADA stands poised to potentially capitalize on this possible run better than most other chains.
In the shorter term, a correction might be in play as the fuel for further upside appears to be diminishing. A daily close below the 0.6175 level could be viewed as the initial sign. Subsequently, potential key support levels to monitor include 0.53, 0.50, the 34-day moving average, and finally, the 0.42 level. Over the medium term, as long as the 0.42 level holds, any downside moves could present buying opportunities for crypto swing or hodl traders.
