Like most other cryptocurrencies in the market this week, Cardano has shown signs of bullishness. Bitcoin and Ethereum showed bullishness, especially after the momentary dip that came after the release of the US CPI data on Thursday last week.
Today, Cardano has moved 1% to the upside and trades for $0.37 at the time of writing.
ADA is one of the worst-hit cryptocurrencies due to the 2022 market winter. The cryptocurrency has declined about 90% from its all-time high in September 2021. Last year, Cardano traded at about $3.
While the price per token of ADA has faced a massive decline over the last year, its retail investors have gained some traction and now hold about 6% of the token's total supply, in contrast to the 4.8% figure a year ago.
While addresses holding between 100-1,000 tokens now hold 1.15% of the total supply, addresses holding 1,000 – 10,000 tokens now account for 4.95% of the total circulating supply. Despite this, the pressure on ADA appears to be mounting.
ADA is well below its all-time highs and now appears to have hit a local bottom around the 23.6% of the Fibonacci level, as illustrated below.
Cardano has bounced off this level and appears to have been rejected at the next Fibonacci resistance around the $0.38 level.
Cardano is below both the 50 (yellow) and 100-period (red) moving averages, indicating that the bears are in control of the market.
To push back against the bearish conditions of the market, Cardano needs sufficient bullish momentum to fight back against the bears and break through the resistance around the $0.38 – $0.4 zone.
In a new video from Cardano founder, Charles Hoskinson, has mentioned that the Vasil hard fork is more focused on expanding the scalability of the Cardano network. According to Hoskinson, the Vasil hard fork is expected to increase the network's capacity, making it more scalable.
Last year, after the Alonzo hard fork that introduced smart contract functionality to the network, Cardano rose to become one of the leading Defi platforms in the crypto ecosystem. The Alonzo hard fork made Cardano one of the closest competitors to other big Defi ecosystems like Ethereum and Solana. The Vasil hard fork is expected to do something similar.
Overall, Cardano's MVRV (Market Value to Realized Value) metric has put the cryptocurrency in a critical buy zone.
Historically, the MVRV metric negatively correlates to price and has experienced a pullback to around -17.5%. This indicator's readings, among other metrics, can be interpreted as a buy signal for Cardano.
Although the price action and several other indicators may indicate a clear bounce off the $0.355 support, traders should wait for a break above the $0.38 to $0.4 resistance before jumping in.
Disclaimer: The author's comments and recommendations are solely for educational and informative purposes. They do not represent any financial or investment advice. Always DYOR (do your own research)