Key Insights:

• Cardano’s price consolidation may soon end as CPI data release could trigger a market-wide crypto rally.
• Growing buy orders suggest increasing market confidence in Cardano despite declining whale activity.
• Technical indicators show a possible bullish breakout for Cardano, with investors closely watching key resistance levels.

Cardano (ADA) is currently navigating a critical phase, with its price showing potential for a breakout as market dynamics evolve. As the United States Bureau of Labor Statistics prepares to release the latest Consumer Price Index (CPI) data, the crypto market is watching closely to see how ADA’s price will respond. 

Despite some challenges, including declining whale activity, the Cardano network continues to grow, hinting at possible upward movement if certain conditions align.

Cardano Price Stagnation and Market Demand

Over the past week, ADA has underperformed relative to the broader crypto market. While the global crypto market cap increased significantly, ADA’s price moved modestly from $0.28 to $0.33. ADA’s price has consolidated around the $0.33 level for the last three days. This stagnation comes as the broader market experienced a surge fueled by positive developments such as Solana ETFs being approved in Brazil and Russia’s legalization of crypto mining.

Despite the lacklustre price action, there are signs of growing market demand for ADA. Recent on-chain data reveals an increase in buy orders, with the total amount of buy orders surpassing sell orders. 

Source: IntoTheBlock

Specifically, 198.86 million ADA in buy orders were recorded, compared to 161.42 million ADA in sell orders. This demand surge could signal a bullish trend for ADA soon, provided the overall market conditions support such a move.

Anticipation Builds Around Upcoming CPI Data Release

The release of the U.S. CPI data is highly anticipated, as it is expected to influence short-term market movements, particularly for Bitcoin. The CPI data is projected to reflect a 3% year-over-year inflation rate, consistent with the previous month, with a slight month-over-month increase of 0.2%.

As the market prepares for the release, ADA’s price increased by 2.1% in the past 24 hours, trading at $0.3402. If the CPI data meets expectations, it could increase Bitcoin’s price, potentially boosting the entire crypto market, including Cardano. This could provide the necessary momentum for ADA to break above its current resistance levels, particularly if trading volume increases.

While the Cardano network is expanding, with an 8.5% increase in daily active addresses over the last 24 hours, whale activity has declined noticeably. The network’s growth is evidenced by the rise in new adoption rates, with new addresses making up 26% of all on-chain activity. This indicates that new investors are entering the Cardano ecosystem, typically a positive sign for the network’s prospects.

However, large holders, or whales, appear to be exiting the network. Data from IntoTheBlock shows a 99.77% drop in whale activity over the past week, with large holders offloading approximately $4.32 million worth of ADA in the last three days. This decline in whale activity raises questions about the sustainability of any potential price rally, as these large investors often play a crucial role in driving market momentum.

Technical Indicators Signal Possible Price Movement

From a technical perspective, ADA’s price is below both the 50-day and 200-day exponential moving averages (EMA), indicating a bearish trend. The price faces resistance at $0.3432, $0.3600, and $0.3743, while support remains strong at the $0.3200 level. The ADA price chart also shows a Symmetrical Triangle pattern, which can precede either an upward or downward breakout.

Source: TradingView

Despite the low trading volume, which is common before a major price move, there are signs that a breakout may be on the horizon. The Moving Average Convergence/Divergence (MACD) indicator has recently flashed a bullish cross, suggesting that bulls could soon dominate ADA’s price action. Additionally, the Relative Strength Index (RSI) is neutral at 51, indicating that the market is waiting for a clear direction.

The increase in open interest over the last 24 hours further supports the possibility of a bullish breakout. Investors are showing renewed interest in ADA, which, combined with the positive indicators from the MACD and RSI, could lead to a price surge if ADA breaks above the symmetrical triangle pattern.

Editorial credit: Dennis Diatel / Shutterstock.com