Cardano’s price saw a significant surge on May 4, surpassing $0.47. With increasing demand from investors, ADA appears to be on track for further growth. The price of ADA struggled to gain momentum in April 2024 as the crypto market underwent a correction phase. By the end of April 30, Cardano was trading at a two-week low of $0.43. However, this low price attracted investors to ADA when the market began to recover in May.
The chart above illustrates the rapid climb of Cardano’s price, increasing by 15% from $0.43 on April 30 to a daily peak of $0.47 on May 4. The struggles Cardano faced in April were primarily due to the declining traction in the Cardano DeFi ecosystem. During the month, investors withdrew over 36 million ADA from Cardano-native DeFi protocols, leading to a 35% drop in prices.
Despite the ongoing struggles in the DeFi scene, on-chain data trends suggest that swing traders entering the overall crypto market rebound this week may be the main driving force behind ADA’s 15% price bounce. This observation is supported by IntoTheBlock’s Exchange On-chain Market Depth chart, which displays the current volumes of active buy and sell orders for ADA on recognized exchanges and trading platforms.
The data from the aggregate exchange order books reveals that bullish swing traders have taken control of the Cardano spot markets in recent days. The current market-depth data shows that bulls have placed active buy orders for 251 million ADA at an average price of $0.47, while bears have listed 230 million ADA for sale. This creates an excess market demand of 20 million ADA. According to the basic law of supply and demand, when buy orders exceed sell orders by such a large margin, it increases the likelihood of a further price surge as buyers compete for the limited number of orders by raising their bids. This explains the 15% surge in Cardano’s price over the past three days.
If this market dynamic continues to favor the bulls, investors can expect further upward movement in the coming days. The current excess demand of over 20 million ADA suggests that Cardano’s price could potentially reach the $0.60 milestone. However, reaching this target may not be easy for the bulls, as there is a significant sell wall at $0.50, according to IntoTheBlock’s GIOM data. The data shows that 181,620 addresses bought 2.26 billion ADA at an average price of $0.49. If these investors decide to book early profits, Cardano’s price may struggle to surpass the $0.50 territory. However, if the bulls manage to overcome this sell wall, ADA could advance towards $0.60 before encountering further resistance.
Disclaimer: This article provides informational content and should not be considered financial advice. The opinions expressed in this article are solely those of the author and do not reflect the views of The Crypto Basic. Readers are advised to conduct thorough research before making any investment decisions, and The Crypto Basic is not responsible for any financial losses incurred.