Cardano (ADA) has witnessed a remarkable surge in price within the past 24 hours, fueled by the ripple effect of Ripple’s recent legal victory against the U.S. Securities and Exchange Commission (SEC). Traders have been closely examining the implications of this ruling on the broader cryptocurrency market, leading to a surge in ADA price by 6% to reach $0.379, its highest level in over a month. Although some of these gains were trimmed as traders sought to secure their profits, ADA/USD still recorded an overall increase of 20% in the 24-hour timeframe.
Cardano faced an enormous setback in June when the SEC classified it as a security in its legal actions against major crypto exchanges Binance and Coinbase. This classification led to a significant decline of 45% in ADA’s price. However, the recent legal victory by Ripple has breathed new life into the cryptocurrency, and it has now recouped almost all of its losses. Cardano, alongside other cryptocurrencies that have been accused of being securities, can now defend themselves in court.
Interestingly, large ADA holders, commonly referred to as whales, have seemingly remained inactive while ADA price experienced double-digit gains in the last 24 hours. The number of daily ADA transactions exceeding $100,000 reached its highest point since June, indicating heightened activity. However, the balance group holding 100,000-100 million ADA remained unchanged, suggesting that the wealthiest ADA holders may have been selling or redistributing their holdings during the price surge.
From a technical perspective, ADA’s substantial rally has pushed its price into “overbought” territory, indicating a possible consolidation or correction phase in the coming days. On July 14, ADA’s daily relative strength index (RSI) surpassed the 70 threshold, signaling an overbought condition. Additionally, ADA/USD is currently testing a long-term trendline and the 200-day exponential moving average near the $0.35 resistance level, which could restrict further upside potential.
In the event that bears manage to significantly lower the price, ADA may find support at $0.32 in July. This level has been previously observed in October 2022-November 2022 and January 2023-March 2023. Further sell-offs could potentially drive Cardano’s price down to $0.30, representing a 12.5% decrease from its current levels in July.
Conversely, the bulls maintain an optimistic outlook for ADA’s future. The weekly candle chart suggests that ADA price is forming a classic bullish reversal pattern known as the double bottom pattern. This pattern emerges when the price forms two consecutive local lows, followed by a sharp rebound towards a common neckline resistance. If the price breaks above the neckline, it could rally by a height equal to the maximum of the pattern. Based on this scenario, Cardano bulls have set their sights on a price target of $0.45 by the end of 2023, representing a potential increase of 150% from the current levels.
Cardano’s recent surge in price can be attributed to the ripple effect of Ripple’s legal victory against the SEC. The ruling has instilled confidence in cryptocurrencies previously accused of being securities, enabling them to defend themselves in court. While technical indicators suggest a potential consolidation phase for ADA, the bulls remain optimistic about its future, pointing towards the formation of a double bottom pattern. As the crypto market continues to evolve, it is crucial for investors to closely monitor these developments and consider the potential implications on their investment strategies.
