Source: Cointelegraph Original: "{title}"
The price of Cardano (ADA) successfully achieved a steady increase of 13.5% in March after a 32% drop in February. This altcoin still fell by 15% in the first quarter, but technical data is beginning to show that the recent price uptrend may continue.
Cardano daily chart. Source: Cointelegraph/TradingView
Although ADA's price has been consolidating between $0.78 and $0.70 for the past 10 days, the social sentiment associated with this altcoin has reached a new high for the year.
Cardano's "bullish" sentiment surges to a four-month high
According to on-chain intelligence platform Santiment, Cardano's social sentiment has reached its highest positive level in four months.
Recent comments from the U.S. Securities and Exchange Commission (SEC) have encouraged ADA investors, as the commission classified Cardano's use case as "smart contracts for government services." Following the SEC's statement, ADA received the highest proportion of positive evaluations since the first week of November 2024.
Santiment's Cardano crowd sentiment score. Source: X.com
The rise in social sentiment is typically associated with an increase in trading activity, sometimes accompanied by price increases. In the fourth quarter of 2024, the rise in ADA's positive social sentiment coincided with active trading. However, the current situation is slightly different.
Data from Cardanoscan.io shows a significant difference in the number of active trades between early November 2024 and now. In the fourth quarter, the average number of trades remained above 100,000 for most of November and December, but has currently decreased by about 70%, with 26,437 trades on March 18.
Daily trading volume and fees chart. Source: cardanoscan.io
Despite the weak on-chain activity, Michael Heinrich, CEO of 0G Labs, told Cointelegraph that Cardano's strength lies in its community "lobbying." When discussing the inclusion of ADA and Ripple (XRP) in the U.S. digital asset reserve, Heinrich expressed, "They have been around in this space for a while: these tokens have been out for some time, they have liquidity, and it is unlikely that unexpected situations will suddenly arise."
Will ADA rise by 20% before the end of March?
Despite the disappointing on-chain data, ADA's price has historically reacted positively to good news.
Although it has been in a downtrend since reaching a high of $1.32 in 2024, the price of this altcoin has remained above the 0.50 level of the Fibonacci retracement. This indicates that ADA's long-term (HTF) chart is still technically in an uptrend.
ADA/USDT daily chart. Source: TradingView
As Cardano fluctuates within its parallel channel, it has maintained support at the ascending trend line (black line). Currently, the immediate resistance level is at the upper limit of the channel at $0.78, which is supported by the 200-day exponential moving average (200-DEMA, orange line). If a bullish candle closes above the 200-day exponential moving average on the daily chart, it would indicate a shift to a bullish trend, potentially triggering a price breakout above $0.78.
The direct target range above $0.78 is between $0.84 and $0.88, where there is a daily fair value gap (FVG). A retest of $0.88 would imply a 20% increase from the current price.
However, historically, Cardano has experienced prolonged periods of consolidation, which may limit its short-term gains. A breakout above $0.78 would further confirm the uptrend, but before that, this altcoin may continue to fluctuate between $0.78 and $0.70.
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This article does not contain investment advice or recommendations. Every investment and trading operation carries risks, and readers should conduct their own research when making decisions.
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