Cardano saw the launch of the Midnight Network on the 8th of December. This zero-knowledge, privacy-focused sidechain uses the Hydra scaling solution to achieve 100,000 tps in testnet conditions.
It could lead to increased demand for the ADA token and also drive network adoption.
ADA begins to climb, slow but steady
Source: ADA/USDT on TradingView
On the 1-day timeframe, the structure was broken bullishly after a daily session close above $0.439. This level had been the previous lower high.
The $0.4 area, highlighted by the cyan box, represented a demand zone that triggered the structural break.
It had been retested as support over the weekend and saw a bullish reaction. Since Sunday’s low at $0.405, Cardano has rallied 4.9% in under 24 hours, at the time of writing.
The A/D indicator has begun to trend higher over the past two weeks, showing that demand was slowly increasing. The MACD also indicated weakening bearish momentum.
Source: ADA/USDT on TradingView
The 1-hour chart also leaned bullishly. Like the daily timeframe, a bullish structure break occurred in recent hours, from a demand zone at the $0.41 area.
It has been retested as well, and the imbalance (white box) was being challenged.
The A/D indicator showed buying pressure was noticeable but not overwhelming over the past two days. The MACD also hinted at bullish momentum, but recent volatility has dampened its readings.
The bearish Cardano case
Since the daily and hourly timeframes were bullish, the bearish case was the less likely outcome over the coming week and month. However, it still needs to be addressed to prepare traders for a potential downturn.
A drop below $0.406 and $0.385 would be needed for swing traders to begin considering flipping their bias bearishly.
A drop below the local low at $0.37 would represent a bearish structure shift, and long traders would need to exit the market immediately or wait for a bounce to close positions.
Cardano traders’ call to action- Bullishness brewing
The bullish structure across the timeframes chosen meant that a move toward the $0.5-$0.52 resistance zone is in progress. In the short term, the $0.44-$0.45 area is likely to pose an obstacle to the bulls.
The next long-term resistance above $0.52 was $0.68. A market recovery could send Cardano prices rallying toward $0.7 and possibly even higher.
Final Thoughts
- Traders have reason to be bullish, as the hourly and daily timeframes showed a bullish structure.
- The upward move could be a slow grind rather than a quick rally, which increased the likelihood of a breakout past $0.52.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
Source: https://ambcrypto.com/cardano-rallies-from-0-40-support-as-midnight-network-launches-more-gains/
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