ADA, the native token of the Cardano blockchain, is poised to continue its upward momentum as it has formed a bullish price action pattern. After experiencing significant gains, ADA appears to be consolidating within a tight range near the strong resistance level of $1.25 and is struggling to break through this level.
During this ongoing consolidation, CoinPedia’s technical analyst found a bullish flag and pole price action pattern in four hours. Based on recent price action, if ADA breaks this pattern and closes a four-hour candle above the $1.25 level, it could potentially soar by 30% to reach the $1.63 level in the coming days.
At present, the asset’s Relative Strength Index (RSI) stands at 54, which is below the overbought zone, indicating that ADA still has room to rally in the coming days. The RSI is a technical indicator used to determine whether an asset is in an overbought or oversold zone, helping traders and investors make informed decisions.
Based on this bullish technical analysis, it appears that investors and whales have shown strong interest in the altcoin, as reported by the on-chain analytics firm Coinglass. Data from ADA’s spot inflow/outflow indicates that exchanges have witnessed a significant outflow of $98.37 million worth of ADA.
This significant outflow indicates that whales, institutions, or retail investors collectively moved substantial amounts of ADA from exchanges to their wallets. Historically, such activity on exchanges often hints at upside momentum, presents a potential buying opportunity, and reduces the likelihood of a price decline.
Combining these on-chain metrics with technical analysis suggests that bulls are currently in control, which could support ADA in breaking through the $1.25 resistance level.
At press time, ADA is currently trading near $1.22 and has registered a price gain of 1.5% in the past 24 hours. However, its trading volume has dropped by 20% during the same period, indicating lower participation from traders and investors compared to the previous day.
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