Why is Cardano (ADA) Price Up Today?

NOIDA (CoinChapter.com)— Cardano’s ADA token price is trying to continue its uptrend on Aug. 7, though it seems the bearish pressure could be too much for the token. However, some on-chain metrics and a bullish technical pattern could be the reason why Cardano price remains up today, but no promises.

Upgrade And On-Chain Metrics Driving ADA Price

Recent developments in Cardano (ADA) have sparked a notable price uptick, driven by key bullish factors. A critical on-chain metric reveals that large holders, particularly those holding between 10 million and 1 billion ADA, have been steadily accumulating the asset.

This accumulation trend indicates strong confidence among institutional players and whales, suggesting that the market perceives ADA as undervalued or poised for future gains. Such accumulation reduces the circulating supply, creating upward pressure on the price.

Moreover, the forthcoming Cardano network upgrade, with 58% of nodes already migrated to version 9.1.0, contributes to the bullish sentiment.

The upgrade, essential for the chain’s hard fork, requires 70% adoption. Market participants expect the migration to be complete within a week. The upgrade would help enhance the network’s capabilities, boosting investor confidence and driving positive sentiment.

Besides, the anticipation of an upgrade has historically led to price appreciation for an asset.

Moreover, the futures market data provides a positive outlook, with a stabilizing open interest and a neutral to slightly positive weighted funding rate. This indicates a balanced leverage environment, reducing the risk of significant downside pressure from over-leveraged positions.

Furthermore, a low level of activity in spent coin age bands suggests that long-term holders are not offloading their ADA, reinforcing the accumulation narrative. The combination of these factors underpins the current upward momentum in ADA’s price, reflecting a broader positive sentiment in the market.

A Bullish Setup Could Be Why Cardano Price Is Up Today

Meanwhile, the ADA USD pair continued moving inside a bullish technical pattern called the ‘falling wedge.’

A falling wedge pattern features a pair of converging trend lines connecting lower highs and lower lows, forming a narrowing shape that slopes downward.

The pattern typically suggests that an asset’s price, while consolidating in a downtrend, is losing bearish momentum and preparing for a potential reversal to the upside. Typically, a breakout occurs in the direction of the overall trend, which, for a falling wedge, is upward.

However, the token faces stiff resistance from the confluence of the 20-week (red), 50-week (purple), 100-week (blue), and 200-week (green) EMA trendlines near $0.49. The recent market crash has not helped ADA’s cause either.

To estimate the price target of a falling wedge pattern, traders measure the widest part of the wedge at the beginning of the formation. They then project this distance upward from the point of the breakout to set a potential target.

An accompanying increase in trading volume can further confirm the reliability of the breakout. Higher volume during the breakout suggests stronger market conviction.

According to technical analysis rules, ADA price could rally over 142% to reach the pattern’s theoretical price target near $0.8.

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