Cardano Price Forecast: ADA gears up for a potential breakout run

Source Fxstreet
  • Cardano edges higher within a falling wedge pattern, with bulls targeting a breakout rally. 
  • Optimism remains steady among Cardano derivative traders.
  • On-chain data shows declining profit booking and active addresses.

Cardano (ADA) trades above $0.80 at press time on Friday, with bulls trying to overcome the 3.26% loss from the previous day. Cardano’s recovery teases a potential falling wedge pattern breakout on the 4-hour chart amid steady optimism among derivative traders. However, the on-chain data flash weakness as profits and network activity decline. 

On-chain data reveals underlying weakness

The Network Realized Profit/Loss (NRPL) is used to gauge the net amount of profit or loss realized by token holders after on-chain transactions. Santiment data shows Cardano’s NRPL stands at 3.48 million ADA, down from 13.98 million ADA on Thursday. This indicates a significant decline in the amount of profits booked by ADA holders, suggesting a drop in bullish momentum. 

Additionally, the number of active addresses on Cardano dropped to 24,455 on Friday, from 24,955 the previous day, indicating a decline in network activity. Cardano stands on thin ice as on-chain data points to fading bullish momentum and network activity.

Cardano nears a falling wedge pattern breakout

Cardano edges higher by over 2% on the day, challenging an overhead resistance trendline on the 4-hour chart, formed by connecting the highs of August 14 and August 25. This trendline completes a falling wedge pattern with a support trendline connected by the August 20 and September 1 lows. 

If Cardano marks a decisive close above the 200-period Exponential Moving Average (EMA) at $0.8335, it would confirm the falling wedge pattern breakout. The breakout rally in Cardano could target the R1 pivot level at $0.8913. 

Adding to the optimism, Cardano’s Open Interest (OI) holds above $1.570 billion, following the surge in mid-August. This indicates steady optimism among derivative traders. 

ADA Open Interest. Source: Coinglass

However, the technical indicators on the 4-hour chart flash mixed signals after the chaotic decline over the past few days. The Moving Average Convergence Divergence (MACD) approaches its signal line for a crossover, which would indicate a bullish shift, just a day after a bearish turnaround on Thursday. 

The Relative Strength Index (RSI) reads 52 on the same chart, surfacing above the halfway mark, which indicates a rise in buying pressure. Even so, the 50-period EMA shows a declining trend and has crossed under the 200-period EMA, signaling a Death Cross pattern. 

Looking down, a reversal from the 200-period EMA could result in a renewed downcycle within the falling wedge pattern. If so, ADA could extend the decline to the lower support trendline near $0.7788. 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Bitcoin Climbs to $111.5K as Altcoins Struggle Ahead of Payroll ReportBitcoin saw a modest rise on Friday, buoyed by gains across risk-sensitive markets as investors awaited the release of U.S. nonfarm payrolls data.
Author  Mitrade
Sept 05, Fri
Bitcoin saw a modest rise on Friday, buoyed by gains across risk-sensitive markets as investors awaited the release of U.S. nonfarm payrolls data.
placeholder
Asian Currencies Flat as Dollar Softens Amid Labor Market and Fed Rate-Cut FocusMost Asian currencies slipped slightly on Thursday as the U.S. dollar recovered some of its overnight losses, driven by increasing market confidence that the Federal Reserve will reduce interest rates this month due to ongoing signs of labor market cooling.
Author  Mitrade
Sept 04, Thu
Most Asian currencies slipped slightly on Thursday as the U.S. dollar recovered some of its overnight losses, driven by increasing market confidence that the Federal Reserve will reduce interest rates this month due to ongoing signs of labor market cooling.
placeholder
Australia’s Trade Surplus Reaches 18-Month High in July Driven by Export GainsAustralia’s trade surplus expanded more than anticipated in July, primarily fueled by robust export activity as demand for commodities in key Asian and European markets showed slight recovery during the month.
Author  Mitrade
Sept 04, Thu
Australia’s trade surplus expanded more than anticipated in July, primarily fueled by robust export activity as demand for commodities in key Asian and European markets showed slight recovery during the month.
placeholder
S&P 500 and Nasdaq Futures Climb on Google Ruling Amid Tariff ConcernsS&P 500 and Nasdaq futures climbed modestly on Tuesday evening, fueled by strong gains in Alphabet Inc. after a court handed down a less stringent antitrust ruling than initially feared.
Author  Mitrade
Sept 03, Wed
S&P 500 and Nasdaq futures climbed modestly on Tuesday evening, fueled by strong gains in Alphabet Inc. after a court handed down a less stringent antitrust ruling than initially feared.
placeholder
Asian Stocks Slip as Australia and China Show Limited Reaction to Positive DataAsian equities declined on Wednesday, following Wall Street's losses driven by escalating concerns over U.S. trade tariffs.
Author  Mitrade
Sept 03, Wed
Asian equities declined on Wednesday, following Wall Street's losses driven by escalating concerns over U.S. trade tariffs.
Related Instrument
goTop
quote