- Cardano outperformed Bitcoin in August.
- ADA’s open interest stabilize as hodlers positions grow.
Cardano [ADA] has shown impressive strength, recently outperforming Bitcoin [BTC] in the month of August.
ADA’s strong performance against BTC has been one of the top highlights, positioning it among the top five cryptocurrencies that outperformed BTC.
This outperformance suggests that Cardano may be poised for higher prices as we move into the final months of the year.
Source: The Block x CoinGecko
ADA price action forms triple bottom
Examining Cardano’s price action reveals a potential bullish setup on the daily timeframe. ADA appears to have found strong support at the $0.32 level, creating a triple-bottom pattern.
The first touch occurred during the market crash on August 5th, and subsequent touches reaffirmed this support level, indicating a solid floor for Cardano.
In addition, ADA is consolidating within a triangle pattern, with the triple-bottom base serving as the foundation. The descending trendline has resisted recent price highs, but a breakout above this pattern could propel ADA higher.
Source: TradingView
Using the Fibonacci retracement tool, if ADA breaks and stays above the 50% retracement level, it would signal a shift in sentiment and invalidate the current bearish outlook that has dominated the market for the past five months.
A successful breakout above the $0.37 price level and sustained movement would further confirm a bullish reversal.
If the price reaches the 100% retracement level, which is near $0.45, it would mark a complete reversal of the previous bearish move.
Additionally, the cumulative volume index has been steadily increasing, reaching $401 billion, indicating strong market participation and supporting the case for higher ADA prices.
Addresses by time held
Looking at on-chain data, particularly addresses by time held, we see that ADA’s long-term holders, known as “Hodlers,” are showing optimism for the future.
Hodlers, who have held ADA for over a year, continue to increase in number, demonstrating confidence in the asset.
The 30-day change in holder data shows a slight growth of 0.68%, while traders holding for less than 30 days saw a 3.8% increase, signaling renewed interest in short-term positions.
Source: IntoTheBlock
Cardano open interest
Cardano’s open interest in futures contracts at the $0.35 price level remains stable at $190.98 million.
This steady open interest shows that traders are maintaining confidence in ADA, with no significant fluctuations suggesting decreased interest.
The open interest chart, according to Coinglass, has remained consistent since June 2023, reflecting growing interest in ADA accumulation.
Source: Coinglass
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ADA market sentiment
Finally, market sentiment around Cardano is divided. While the general crowd sentiment leans bearish, the smart money is bullish on ADA.
Historically, smart money tends to anticipate market movements more accurately than the crowd, which typically enters trades too late. With this divergence in sentiment, now could be the right time to consider a trade on ADA as the market conditions improve.
Source: Market Prophit
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