Cardano’s Bullish Potential: Support Zone Near $0.55 Signals Positive Momentum

• Cardano (ADA) experiences a partial retracement after reaching $0.70, losing the critical support level at $0.6.
• Despite this, the blockchain network shows substantial development activity, with an increase in contributors, indicating long-term potential.

After a strong rally to $0.70 earlier this month, Cardano’s native crypto ADA is facing some partial retracement. After attaining a peak of $0.69 on December 14, Cardano (ADA) experienced a subsequent decline. Despite the bullish market structure on higher timeframes, the altcoin also lost the critical support level at $0.6.

Moreover, the Cardano blockchain network registered substantial development activity earlier this week. The platform observed a notable increase in the total number of contributors to development activity, a positive sign for long-term investors signaling that ADA remains a promising asset to retain.

Last week, the Cardano (ADA) price reversed after dropping to its crucial support zone at $0.55. Since then, the ADA price has recovered by nearly 10%. At press time, ADA is trading 2% up at $0.6016 with a market cap of $21.2 billion.

Cardano currently resides within a significant demand zone, spanning from $0.6016 to $0.8421, where 208,690 addresses acquired 2.07 billion ADA tokens. In the event of a dip, support for Cardano’s price is anticipated within the range of $0.5450 to $0.6016. Conversely, should ADA maintain its positive momentum and extend its rally, the altcoin might surpass the resistance at $0.8421, aiming for the psychological barrier at $1.

Courtesy: IntoTheBlock

The Network Realized Profit/Loss (NPL), an on-chain metric assessing the profitability or realized losses of Cardano transactions during the period from December 4 to 19, indicates that ADA holders have been involved in profit-taking. During this timeframe, especially in conjunction with transactions involving whale wallets holding $100,000 or more, significant addresses holding ADA tokens have been realizing gains in the cryptocurrency.

Cardano Price Prediction and DeFi Strength

Cardano (ADA) has been following an upward trend since October 19, marked by higher highs and higher lows, reaching a peak of $0.6802 on December 14. The ADA/USDT 1-day chart suggests a potential climb toward the Fair Value Gap, ranging between $0.7021 and $0.7258. To reach $0.70, Cardano needs to surpass the resistance at the 38.2% Fibonacci retracement level, positioned at $0.6214, which marks the decline from the April 4, 2022, peak of $1.2436 to the December 29, 2022, low of $0.2369.

However, a daily candlestick close below the 10-day Exponential Moving Average (EMA) at $0.5854 could challenge the bullish outlook for Cardano. In case of a decline, potential support levels lie at $0.5854 and the 23.6% Fibonacci level at $0.4745.

The Total Value Locked (TVL) in a blockchain serves as a significant indicator of the chain’s relevance and demand within the market. Cardano’s TVL crossed the $425 million mark on Tuesday, reinforcing a bullish outlook for the asset’s significance in the ecosystem. The DeFiLlama chart reveals that Cardano’s TVL reached its highest point at $444 million on December 14 before retracing to $425 million.