A widely followed crypto analyst says that smart contract platform Cardano (ADA) could be gearing up for a massive move to the upside.
In a new video update, Guy Turner, the host of Coin Bureau, tells his 2.38 million YouTube subscribers that the Ethereum (ETH) competitor may be printing a bullish pattern that could increase its current value by more than 74%.
“The crash altcoins saw in October appears to be due to their correlation to small-cap stocks, which likewise crashed around then. And the reason why small-cap stocks crashed was because long-term interest rates had been rising fast. Since October, long-term interest rates have fallen just as quickly and the result has been an almost a 3x increase in ADA’s price.
Its weekly chart suggests that it could be in the process of painting a bull flag. If that plays out, then ADA could rally as high as $1 given that that’s the next significant zone of resistance.”
The trader also notes that an ADA demand metric is flashing bullish.
“The only demand metric on Cardano that’s been flashing a bullish signal is the total value locked on its DeFi (decentralized finance) protocols.”
However, the trader warns that there is short-term bearish sell pressure due to the large number of ADA tokens held by three main entities behind the project, Emurgo, Input Output Global (IOG) and the Cardano Foundation, which, he says, appear to sell ADA for financing.
“All three appear to be funded by sales of ADA. Case and point, the Cardano Foundation’s first annual report revealed that most of its treasury consists of ADA. And when you consider the fact that it’s been increasing its headcount, it’s safe to assume that its expenses have also increased.
Indeed, the annual report in 2022 admitted this was the case. When you consider that Emurgo and IOG have likewise been spending lots of money on development and hiring it suggests that most of ADA sell pressure may indeed have been coming from these three entities.
Now, don’t get me wrong. This development is bullish for ADA in the long term. But in the short term, it’s bearish.”
ADA is trading for $0.57 at time of writing, up more than 2% in the last 24 hours.
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