Most top-mid cap altcoins currently depict an ongoing consolidation phase and the situation was no different for Cardano. However, certain factors indicated that bulls would win out the consolidation and trigger an upside move in the coming weeks.
Cardano 4-hour Chart
The Visible Range Profile showed that since its 56% plummet, retail investors have offered a lifeline to Cardano around the $0.484-mark. The candles have mostly traded between this newly established support and $0.55 resistance for two weeks, showing an ongoing consolidation phase.
Technically speaking, consolidation typically indicates market indecisiveness, and momentum is split almost equally between buyers and sellers. However, sure signs can help one understand where the price is headed once the pattern is eventually broken.
Now, up until last week, the crypto market recorded investment outflows of $141 Million, with Bitcoin witnessing the bulk of the outflows. However, Cardano and Polkadot were among the few that bucked the macro trend. According to a CoinShares report, both alts observed inflows of $1 Million each last week – an indication that institutional investors were starting to turn bullish.
Meanwhile, judging by the addresses by holdings, large investors have added more and more ADA tokens to their balance throughout May. The development highlighted an ongoing accumulation amongst almost all the holding groups, although whales were yet to fully jump on board.
Can Cardano head towards $0.74?
Judging by the ongoing accumulation trend and investment inflows, ADA was making a strong case for an upside move once the consolidation was broken. It was important that ADA maintained ground above $0.487 support over the short-mid term for that to happen. If so, the price could shit back to $0.61-resistance and break further towards $0.74 over the next couple of weeks.
However, ADA’s directional bias would be dependent on whether or not Bitcoin can head to its next target of $31K. If Bitcoin closes below $29K instead, ADA might be forced to shift lower on the chart. At press time, Bitcoin was teasing a position just above $29,000, so the immediate trend might not be extremely fruitful for Cardano.