Why is Cardano price up today?
The price of Cardano (ADA) has soared in the past 24 hours as traders assess the impact of Ripple’s legal win on the broader cryptocurrency market.
“ADA isn’t a security”
On July 14, ADA price rose 6% to $0.379, its highest level in over a month, only to pare some of those gains as traders booked profits.
Nonetheless, ADA/USD was up around 20% on a 24-hour timeframe, boosted by the euphoria of Ripple’s legal win against the U.S. Securities and Exchange Commission (SEC).
Notably, a federal judge ruled on July 13 that XRP (XRP) sales on public crypto exchanges complied with U.S. securities laws. The ruling provided fodder for cryptocurrencies — that the SEC had accused of being securities — to defend themselves in court.
Related: XRP ruling a ‘watershed moment,’ but we’re not out of the woods yet — Lawyers
ADA is one of those cryptocurrencies; it fell by as much as 45% in June after the SEC deemed it as security in its lawsuits against crypto exchanges Binance and Coinbase. But now, Cardano’s token has erased almost all of those losses.
If $XRP isn’t a security…$ETH isn’t a security$BNB isn’t a security$ADA isn’t a security$SOL isn’t a security$MATIC isn’t a security$ATOM isn’t a security$FIL isn’t a security$ICP isn’t a securityAnd so on…
Not a legal opinion, just common sense.
gg GG
— Chris Burniske (@cburniske) July 13, 2023
Cardano whales are napping
However, whales appear to have stood by as ADA price saw double-digit gains in the last 24 hours.
For instance, the number of daily ADA transactions exceeding $100,000 on the network has risen to its highest count since June.
At the same time, the Cardano supply held by the 100,000-100 million ADA balance cohort was flat during the price rally. Meanwhile, the 100 million-1 billion ADA balance cohort (green) rose sharply due to the decline in the 1 billion-infinity ADA token cohort (gray).
In other words, the richest ADA holders may have been selling (or redistributing) their holdings during the price rally.
What’s next for Cardano’s price?
From a technical perspective, ADA price risks entering a consolidation or correction period in the coming days as its big rally left it “overbought.”
Related: Can XRP price hit $1? Watch these levels next
On July 14, ADA’s daily relative strength index (RSI) crossed above 70, the “overbought” threshold.
In addition, ADA/USD tests a multi-month trendline (orange) and the 200-day exponential moving average (200-day EMA; the blue wave) near $0.35 as resistance, which limits its upside potential.
So if the bears manage to pull the price down significantly, ADA price could test $0.32 in July — also its support level from October 2022-November 2022 and January 2023-March 2023.
Additional selloffs can take Cardano down further down to $0.30 in July, down 12.5% from current price levels.
ADA price double bottom?
Conversely, the bulls will argue for their case by zooming out. Notably, ADA price appears to be forming a classic bullish reversal pattern on the weekly candle chart — with a potential price target 150% higher than today’s.
Dubbed the double bottom, the pattern develops when the price forms two local lows in a row followed by a sharp rebound toward a common neckline resistance. The price can rally by as much as the pattern’s maximum height after it breaks above the neckline.
In other words, the Cardano bulls will target $0.45 by the end of 2023 based on such a scenario.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
