Cardano (ADA) has enjoyed a significant price surge this week, reaching a two-month high. However, despite the positive momentum, several key indicators suggest that ADA's upward trajectory may be facing challenges.
One of the major concerns is the MVRV ratio, which measures the profitability for holders. Currently, the 30-day MVRV ratio is hovering around 13%, indicating that many investors are in profit. Historically, this range has been associated with selling pressure as investors seek to secure their gains. If this trend continues, it could lead to a pullback in ADA's price.
Another red flag is the Relative Strength Index (RSI), which is nearing the overbought zone. This suggests that ADA's price may be overextended, and a correction could be imminent.
While the broader market remains optimistic, the factors mentioned above point to a potential drawdown for ADA. If the price fails to break through the resistance level of $0.42, a correction to $0.37 or even $0.34 could be in store.
In conclusion, while Cardano's recent price surge is encouraging, it's important to remain cautious. The MVRV ratio and RSI suggest that a pullback may be on the horizon. Investors should closely monitor these indicators and be prepared for potential volatility.
September 2024, Cryptoniteuae