Cardano (ADA) has experienced a significant surge in price over the past 24 hours as traders analyze the implications of Ripple’s recent legal victory on the broader cryptocurrency market. On July 14, ADA price rose by 6% to reach $0.379, its highest level in over a month. However, some of these gains were later reduced as traders decided to secure their profits. Despite this, ADA/USD still recorded a 20% increase within the 24-hour timeframe, driven by the excitement surrounding Ripple’s win against the U.S. Securities and Exchange Commission (SEC).
The ruling by a federal judge on July 13 determined that XRP (XRP) sales on public crypto exchanges were in compliance with U.S. securities laws. This decision has provided support for cryptocurrencies that had been accused by the SEC of being securities, enabling them to defend themselves in court. Cardano (ADA) is one such cryptocurrency that experienced a substantial decline of 45% in June when the SEC classified it as a security in its legal actions against crypto exchanges Binance and Coinbase. However, Cardano’s token has now recovered almost all of those losses.
Whales’ Behavior During ADA Price Surge
Interestingly, large ADA holders, known as whales, seemed to have remained inactive as ADA price witnessed double-digit gains in the last 24 hours. For example, the number of daily ADA transactions exceeding $100,000 on the network reached its highest point since June. Simultaneously, the Cardano supply held by the 100,000-100 million ADA balance group remained unchanged during the price rally. On the other hand, the balance group with 100 million-1 billion ADA (green) experienced a significant increase due to a decline in the cohort holding 1 billion-infinity ADA tokens (gray). This suggests that the wealthiest ADA holders may have been selling or redistributing their holdings during the price surge.
Technical Analysis and Future Price Movements
From a technical perspective, there is a possibility that ADA price may enter a consolidation or correction phase in the upcoming days as its substantial rally has pushed it into “overbought” territory. On July 14, ADA’s daily relative strength index (RSI) surpassed the 70 threshold, indicating an overbought condition. Additionally, ADA/USD is currently testing a long-term trendline (orange) and the 200-day exponential moving average (blue wave) near the $0.35 resistance level, which could limit its upside potential.
In the event that bears manage to significantly lower the price, ADA may test the support level at $0.32 in July, a level previously seen in October 2022-November 2022 and January 2023-March 2023. Further sell-offs could potentially drive Cardano down to $0.30 in July, representing a 12.5% decrease from its current price levels.
Conversely, the bulls are optimistic about ADA’s future and provide an alternative viewpoint. Notably, ADA price appears to be forming a classic bullish reversal pattern on the weekly candle chart, 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. Once the price breaks above the neckline, it can rally by a height equal to the maximum of the pattern. Based on this scenario, Cardano bulls are targeting a price of $0.45 by the end of 2023, representing a potential increase of 150% from the current levels.