As a researcher with extensive experience in the crypto market, I’m bullish on Cardano (ADA) following its notable rise to $0.476 this week. The upward trend in ADA is in line with broader positive sentiment towards cryptocurrencies, as Bitcoin (BTC) and Ether (ETH) also experienced gains of approximately 2.5% and 2.70%, respectively.
At the beginning of this week, Cardano (ADA) underwent a significant increase, gaining approximately 3.70% and touching a price of $0.476 on May 6th.
Today, ADA‘s growth follows a positive trend observed in the broader crypto market. For example, Bitcoin (BTC) and Ether (ETH), the top two cryptocurrencies by market value, have experienced around a 2.5% increase for Bitcoin and about a 2.70% rise for Ether.
The increasing trend in cryptocurrencies is driven by growing investor enthusiasm, fueled in part by the Federal Reserve’s anticipated more lenient monetary policy stance for 2024. Meanwhile, ADA experiences additional positive influences as detailed below.
Cardano founder teases Bitcoin Cash partnership
As a crypto investor, I’m thrilled to see the price surge of ADA today. This uptick in value might be attributed to the recent proposal put forth by Cardano’s founder, Charles Hoskinson, suggesting a partnership with Bitcoin Cash (BCH).
As a data analyst, I have examined the recent development in the cryptocurrency community. On May 4, Charles Hoskinson, the founder of Cardano, proposed a hypothetical poll to gauge the interest within the community regarding the potential integration of Cardano with Bitcoin Cash. By May 6, this poll had amassed an impressive total of 14,360 votes. Among these respondents, approximately 68.1% expressed their support for such an integration.
Hoskinson proposed the term “partnerchain” to indicate that Bitcoin Cash might need to be linked or synchronized with Cardano for their respective upgrades to be compatible. Nevertheless, reaching a consensus on the technical details and gaining agreement from all stakeholders and developers is still a significant challenge.
ADA’s crypto market dominance improves
As a cardano analyst, I would explain that a significant portion of investments has been transferred from Bitcoin, which represents more than half of the total cryptocurrency market value, towards Cardano recently. This shift in capital flow is the primary reason behind ADA‘s price growth today.
As a researcher studying the cryptocurrency market, I observed an uptick of 1.54% in the ADA/BTC pair on May 6th, which translated to approximately 729 satoshis. In tandem with this rise, the Cardano Dominance Index (ADA.D) registered a growth, indicating that ADA’s market capitalization was expanding relative to the overall crypto market.
The recent advancements indicate that ADA is making significant strides in competing with Bitcoin, as it continues to seize a more substantial portion of the overall cryptocurrency market value.
In April, the trend of capital movements in crypto asset funds became more evident, with Cardano funds attracting an inflow of $1.5 million. On the other hand, Bitcoin and Ether funds experienced significant outflows, amounting to $54 million and $123.8 million respectively, based on CoinShares’ weekly report.
In simpler terms, the price of Cardano versus Bitcoin is indicating potential for recovery based on a bullish trend emerging between their daily Relative Strength Indices (RSI). This development mirrors a similar bullish signal observed in October-November 2023, which was followed by a substantial 30% price increase.
Cardano price outlook
As an analyst, I’d interpret today’s Cardano price surge as a technical rebound originating from its short-term support level around $0.455. Remarkably, this significant support aligns with the bottom of the right shoulder in Cardano’s prevailing inverted head and shoulders (IH&S) configuration, as depicted below:
After the price of ADA surpasses its neckline resistance at $0.476, IHS (Head and Shoulders) patterns typically resolve. The height of this resolution can reach as far as the distance between the head’s trough and the neckline. Therefore, a potential target for ADA’s price rise in May could be around $0.543.
In simpler terms, if the price of ADA pulls back from its head and shoulders neckline (as depicted in the daily chart), it could lead to the formation of a head-and-shoulder pattern. This potential pullback may correspond with the resistance line of ADA’s descending trendline.
As a crypto investor, I’m keeping an eye on the current downtrend that has brought the price to around $0.351. This level also coincides with a descending trendline support. If this bearish pattern continues and eventually completes in May, we might see the price testing this area as a potential target.
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2024-05-06 16:19