- Cardano price shows signs of a breakout, forecasting a 15% rally to an area that holds a strong selling interest.
- The momentum comes amid 6.61 million ADA coming in, a net flow value attributed to 34,350 large transactions in two days.
- The bullish outlook would be invalidated upon a daily candlestick close drop below $0.35.
Cardano (ADA) price appears to be ready to finally break out from the consolidation after flipping above a crucial roadblock. The optimism comes as the ADA token recorded a massive spike in large transactions nearing 35,000 in 48 hours.
Also Read: Cardano price turns bullish as ADA blockchain activity surpasses Ethereum development
Cardano price to rally with 6.61 million ADA in net flow value
Cardano (ADA) price shows signs of a breakout, akin to what happened in December and March, as indicated in the daily chart below. The altcoin has flipped above 50- and 100-day Exponential Moving Averages (EMA), resistance levels that held ADA hostage for almost a full month. This indicates a growing momentum among bulls.
If this buying pressure is sustained, Cardano price could rise to confront the next supplier congestion zone at $0.39 presented by the 200-day EMA. Such a move could push ADA to tag the $0.41 resistance level before a chance to tag the supply zone around the $0.43-$0.45 level. Notably, a supply zone is a large area of resistance defined by strong selling pressure.
As such, investors could place their stop losses at the $0.43 level for two reasons. First, to lock in the 15% profits achieved once ADA tags the supply zone. Secondly, it would spare them from the correction and, therefore, losses that would ensue once a sell-off begins at that level.
This bullish outlook is supported by the Relative Strength Index (RSI) that was pointing north and the Awesome Oscillators (AO) flipping above the midline to show rising momentum that could push Cardano price higher.
ADA/USDT 1-Day Chart
To put this in perspective, note how Cardano price pulled back after testing the supply zone marked in red in the daily chart above.
On-chain metric: Large transactions
The bullishness for Cardano price comes after the number of large transactions on the network went ballistic, recording a net flow value of 6.61 million ADA tokens. Data from IntoTheBlock shows the number of large transactions surging since June 2 from 10,001 to 14,780 on June 3.
Similarly, the volume of transactions has risen from 57.77 billion on June 2 to 63.57 billion on June 3.
On the other hand, selling pressure from the 200-day EMA at $0.39 could repel Cardano price, causing a drop below the 50- and 100-day EMA to find the next support at $0.35, where ADA spent the better part of May.
