Cardano (ADA) Might Not Be Done with Its Uptrend, Here's Why

Though Cardano [ADA] joined the broader market recovery, the token might not be done with its uptrend. This was the opinion of Ali Martinez, a crypto analyst on X (formerly Twitter).

Cardano [ADA] joined the broader market recovery and might not be done with its uptrend. This was the opinion of Ali Martinez, a crypto analyst on X (formerly Twitter).

According to Martinez, the Tom DeMark (TD) Sequential presented a buy signal on Cardano’s chart. This indicator gauges trend exhaustion and identifies a turning point in the price of a cryptocurrency.

ADA on the right track

At press time, ADA changed hands at $0.38. But if validated, the altcoin’s value could be higher, with potential targets at $0.40. However, it is necessary to analyze the token’s potential from an on-chain perspective.

This is because technical indicator alone do not determine price action. To achieve this, AMBCrypto evaluated Cardano’s network activity. Specifically, we looked at the active addresses, new addresses and zero-balance addresses.

All of this put together measures the adoption of ADA and traction on the Cardano’s network. According to IntoTheBlock, the seven-day change of these metrics have been positive.

For instance, new addresses increased by 30.70%. Active addresses climbed by 40.80% while zero-balance addresses rose by 29.24% within the same period.

These increases imply an increase in demand for ADA. If sustained, this could help its price rise more than the 4.23% jump of the last 24 hours.

Buy now, sell later

Furthermore, we examined the price-DAA divergence to confirm if ADA had really offered a buying opportunity. DAA stands for Daily Active Addresses.

As such, the price-DAA divergence is a prime indicator that tell how price movements and network activity influence predictions. According to the chart below, Cardano’s price-DAA divergence was. -36.85%.

Typically, this metric gives potential entry and exit signs. From a trading perspective, if participation grows more than the price, it is a buy signal.

However, if activity on the network cannot match up with the price increase, it indicates that it is time to sell. From the image displayed, it was evident that network activity had grown more than ADA’s price.

Hence, it aligns with Martinez’s prediction above that the uptrend continues, ADA could climb to $0.40. In a highly bullish scenario, the price of the token could jump to $0.42.