Cardano (ADA) continued to exhibit relative weakness on August 1, with the 10th largest cryptocurrency by market cap experiencing a minor dip in the past 24 hours.
This decline, which followed a resistance level of $0.46 about two weeks ago, was exacerbated by low volatility and broader market concerns. Notably, the crypto sector faced heightened anxiety due to potential mass sell-offs of Bitcoin by Mt. Gox creditors, 70% of whom have now been refunded. The German government’s ongoing liquidation of approximately 50,000 BTC further contributed to market uncertainty.
However, despite these challenges, optimism for ADA’s future had surged, driven by positive signals from crucial technical indicators. In a Wednesday post on X, Burak Kesmesi, an analyst at the crypto analytics firm CryptoQuant, highlighted the potential for ADA’s price to rise based on the Market Value to Realized Value (MVRV) ratio. The MVRV is a metric used to evaluate whether an asset is overvalued or undervalued. Investors generally profit when the MVRV score is above 1, whereas a score below 1 suggests losses.
Currently, ADA’s MVRV stands at 0.77, slightly below the simple moving average of 0.82, suggesting that the price has cooled off and could be approaching a buying opportunity. Kesmesi further recommended monitoring ADA’s weekly moving average close above the 365-day moving average (SMA365) as a potential indicator of a sustained bullish trend.
Popular crypto analyst Javon Marks recently also shared a bullish outlook for ADA, noting that the price has recently broken out of significant resistance levels and has exhibited hidden bullish divergences. Marks projected that ADA could reach a target price of $2.77, reflecting an upside of over 552%.
He also speculated that ADA might exceed this target based on historical breakout patterns, possibly reaching as high as $5.30 or even $7.82, suggesting an over 1,000% potential increase from its current price range.
Recent developments further bolster ADA’s bullish prospects. The recent release of Node 9.1.0 marked a crucial step towards the Chang Upgrade, which will introduce phased governance features, making it easier for new governance roles to be onboarded. This upgrade is expected to enhance Cardano’s functionality and appeal.
Additionally, a recent amendment in the SEC’s lawsuit against Binance removing several cryptocurrencies, including ADA, from the list of securities has bolstered the community’s confidence in ADA, further fueling the current bullish sentiment.
ADA was trading at $0.36 at press time, reflecting a 3.68% drop over the past 24 hours.
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