As has been the case with its overall performance, Cardano [ADA] appears to have altered gears in favour of a bullish rebound in June. The ADA bulls are showing their vigour again this week after continuing to rise over the weekend and into Monday, June 6th. But will they be able to maintain their current momentum, or will they need to correct?
A closer examination of ADA’s current price movement reveals that the bulls were supported by a lack of sufficient negative volume towards the end of last week. After reaching the 50% RSI level, the bears lacked enough momentum to send the stock lower. As a result, the minor pullback in the first few days of June was relatively moderate, allowing for more accumulation and an uptrend.
ADA bulls assess the looming resistance
At press time, ADA was trading at R9,63 after a 9.98% decline in the previous 24 hours. However, the price increase has substantially pushed ADA into territory that has already been tested as resistance at least twice. If a similar result occurs, we should predict another bearish pullback in the next few days. Is there breakout potential?
ADA is currently gaining ground above the 50% RSI mark and is approaching its 50-day Moving Average. Before mid-April, ADA had not traded above the 50-day moving average. Such a crossing would boost investor confidence.
ADA’s rise is now being supported by rising bullish momentum and modest accumulation. Given that it is now trading between a descending and a resistance pattern, there is still an opportunity for greater gain. The scope of the bullish reign, though, remains unpredictable and dependent on market conditions.
On-chain indicators may provide a crude but clearer view of whether ADA’s recent rally will be extended. The supply distribution by balances on addresses in ADA exposes what the top holders, sometimes known as whales, have been up to. For example, from 1 June to 6 June, addresses with more than 10 million ADA decreased from 49.13% to 49.08%. Between 1 and 6 June, the proportion of addresses with 1 million to 10 million ADA climbed from 17.44% to 17.51%. The market cap recovery appears to have favoured the latter group.
Whales amassing the token appears to be positive news for ADA. The likelihood of breaking through the restricted range has increased, with the probable implication that ADA’s price floor would likely rise. This assumes that the market is recovering from the risk-on environment that existed in recent weeks.