Cardano (ADA) Poised for 20% Surge as Social Sentiment Soars

Cardano’s price has managed a steady 13.5% increase in March after experiencing a significant 32% dip in February. While the altcoin is still down 15% in Q1, technical data is beginning to indicate a continuation of the recent positive price action. Despite ADA’s price moving sideways between $0.78 and $0.70 over the past 10 days, social sentiment related to the altcoin has hit a new year-to-date high.

Impact of SEC Classification on Cardano

ADA investors received a notable boost from the US Securities and Exchange Commission’s (SEC) recent classification of Cardano’s use case as “smart contracts for government services.” This statement from the SEC was followed by ADA’s highest ratio of positive comments since the first week of November 2024. A rise in social sentiment is often aligned with increased trading activity and, at times, higher prices.

Historical Context of Social Sentiment and Trading Activity

In Q4 2024, a rise in positive social sentiment and active transactions went hand in hand for ADA. However, the current environment presents a stark contrast. Data from various sources shows a significant difference between the number of active transaction counts from early November 2024 and now. In Q4, the average transaction count remained above 100,000 for most of November and December, but currently, it is roughly down 70%, with the number of transactions recorded at just 26,437 on March 18.

Community Support and Market Dynamics

Regardless of the weak on-chain activity, Michael Heinrich, CEO of 0G Labs, emphasized that Cardano’s strength lies in “lobbying” its community. Speaking on ADA and XRP’s inclusion in a US Digital Asset Stockpile, Heinrich noted the importance of community engagement in driving the altcoin’s value.

Technical Analysis of Cardano’s Price Movement

The altcoin has maintained a position above the 0.50 Fibonacci retracement line despite being in a downtrend since its 2024 high of $1.32. This indicates that ADA’s high-time frame (HTF) chart remains on a technical uptrend. Cardano has retained support from the ascending trendline while oscillating between its parallel channel.

Resistance Levels and Potential Breakout

Currently, the immediate resistance lies at the upper range of the channel at $0.78, which is supported by the 200-day exponential moving average (200-DEMA). A positive candle close above the 200-DEMA on the daily chart indicates a bullish shift, potentially triggering a move above $0.78. The immediate target above $0.78 lies between $0.84 and $0.88, where a daily fair value gap (FVG) is present. A retest of $0.88 marks a potential 20% return from its current price.

Historical Patterns and Future Predictions

However, historically, Cardano has exhibited prolonged sideways movement, which could limit immediate gains. A break above $0.78 would validate further confirmation for a rally, but until then, the altcoin may continue to range between $0.78 and $0.70.

Conclusion: Navigating the Cardano Landscape

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. As Cardano (ADA) navigates through these market dynamics, the interplay between social sentiment and trading activity will be crucial in determining its next moves.