- Cardano (ADA) could rally 8% to the $0.66-$0.68 supply zone this month.
- Despite short-term bullish momentum, the long-term market structure remains bearish.
- On-chain metrics, including development activity and transaction volume, have declined sharply.
- A break above $0.68-$0.70 could confirm a bullish reversal, but risks of a reversal remain high.
- Traders should watch Bitcoin’s trend for confirmation of ADA’s next big move.
Cardano (ADA) Price Prediction: Short-Term Rally Ahead, But Watch This Critical Level
Cardano [ADA] has been steadily recovering, with a 17% climb since its early July lows of $0.536. As of now, ADA is trading around $0.626, putting it on course for an 8% rally toward the $0.66-$0.68 range. However, while the short-term outlook shows bullish momentum, investors must tread carefully as larger timeframes tell a different story.
Also Read: Cardano Price Prediction: ADA Eyes a 60% Surge Despite Ecosystem Woes
Bearish Market Structure Persists on the Weekly Chart
Despite the recent uptrend, Cardano’s weekly chart still flashes warning signals. Since December, ADA has been forming lower highs and lower lows — a clear indicator of a bearish structure. The critical 78.6% Fibonacci retracement level at $0.535 has acted as support so far, but if it flips to resistance, ADA could face a sharp 30%-40% drop.
Short-Term Bullish Momentum Builds on the Daily Chart
On the brighter side, the 1-day chart reveals a bullish market structure. ADA has been printing higher lows and higher highs over the past two weeks. Breaking past the 50% retracement level at $0.62 and with the RSI climbing above 50, momentum appears to favor the bulls.
Additionally, the On-Balance Volume (OBV) is trending higher, suggesting that buying demand is returning to the market. Still, all eyes are on the $0.684 resistance, a crucial supply zone that overlaps with a fair value gap from June. A break beyond $0.68-$0.70 could signal a more sustained bullish run.
On-Chain Metrics Flash Caution
While the technicals show promise, Cardano’s on-chain data paints a less optimistic picture. Development activity has steadily declined since February, raising concerns about the project’s innovation pace. Additionally, the 180-day circulation and daily active addresses have dropped, suggesting weakened organic demand and reduced transaction activity.
For a strong recovery, Cardano needs renewed network activity and increased adoption. Until then, any rally could be limited.
Should Traders Bet on the Rally?
Traders and investors could target the $0.66-$0.68 range in the short term, particularly if Bitcoin [BTC] continues its bullish trajectory. However, a clear breakout beyond $0.68 remains uncertain. Staying sidelined until ADA decisively clears this resistance zone might be the prudent strategy for risk-averse investors.
