The trigger for the cryptocurrency's growth was the announcement by U.S. President Donald Trump about the creation of a cryptocurrency reserve in the U.S., which will include Cardano. The announcement pushed the ADA price above the $1 mark for the first time in more than a month.
Cardano Investors Are Recovering Losses
The MVRV Long/Short Difference indicator shows a significant increase, indicating that long-term holders are increasing their profits. Such investors usually provide stability to the cryptocurrency's price. When they make profits and choose to hold assets rather than sell, the coin's price receives support that prevents it from falling.
This behavior is consistent with Cardano's recent growth. Long-term holders hold ADA, reinforcing the bullish trend.
The rising profits of long-term holders indicate high investor confidence in the future of the asset. This could mean that the current rally is not just a short-term blip, but the beginning of a more sustainable uptrend.
Cardano's Relative Strength Index (RSI) has reached an overbought zone. Normally, this behavior of the indicator is a signal of a possible price decline. However, history shows that for ADA it can mean a continuation of growth rather than a reversal. The position of the indicator indicates that despite the overbought signal, Cardano may continue to grow.
Previously, when the RSI entered the overbought zone, the price of ADA often continued to rise. This suggests that Cardano may continue to climb. If the momentum continues, ADA could reach new highs despite the traditionally bearish overbought signal.
ADA Price Rising
At the time of writing, Cardano's price is up 60% overnight to $1.06. This is a significant recovery after six weeks of drifting at levels below $1. On the back of Trump's announcement to include the cryptocurrency in the national cryptocurrency reserve in the U.S. ADA has confidently crossed the $1 mark. This level is important as it is a psychological barrier for traders and investors.
Overcoming the $1 mark could mean that ADA is preparing for further growth. Cardano must hold above $1.00 to maintain its uptrend. If the high falls, the price could drop again.
ADA Cryptocurrency: Outlook
If Cardano fails to hold support at $1, the price could drop to the next important level of 85 cents. This would change the current optimistic outlook and slow down a possible recovery. However, if support at the $1 level holds, it will strengthen the rally and create conditions for further price gains.
Many members of the crypto community believe that Trump has given ADA the necessary impetus for the cryptocurrency to move to new highs.
