Key Insights:
- Cardano price forms an inverted head and shoulders, targeting $1.08 if it clears $0.762 resistance.
- ADA’s RSI above 50 supports upside, but negative CMF at -0.08 signals weak buying pressure.
- Hoskinson refutes 318M ADA transfer claims, defending Cardano’s governance transparency.
Cardano (ADA) price has attracted market attention in a recent spike, up by 4% as the bullish sentiment gains momentum. The price increase is in tandem with founder Charles Hoskinson’s defense against allegations concerning the management of unclaimed Initial Coin Offering (ICO) vouchers.
With technical indicators favoring a breakout, ADA could be preparing for a 40% rally to the psychological $1 mark.
Cardano Price Forms Inverted Head and Shoulders Pattern
Cardano price has created a classic inverted head and shoulders pattern, a bullish technical formation that is often used as a precursor to a large uptrend.
The pattern is formed by two swing lows at $0.557 and $0.682, and a recent low at $0.226, and the breakout may emerge if the price breaks the $0.762 neckline.
This is the level in line with the 23.60% Fibonacci retracement that is a critical barrier in determining the bullish trend.
For this breakout to be confirmed, Cardano needs to maintain a daily close above the $0.762 resistance. If this happens, the projected target in line with the pattern’s depth suggests a possible approach to the 50% Fibonacci retracement level around $1.08.
This is indicative of a potential 40% increase from current levels following the general market optimism about ADA.
RSI and CMF Indicators Offer Mixed Signals
Despite the promising price formation, mixed signals from key technical indicators highlight the need for caution. Cardano’s (RSI) is above 50, a bullish signal that momentum is building.
However, the Chaikin Money Flow (CMF) index, signalling that buying and selling pressure, is still negative at -0.08.
This is an indication that, though momentum is developing from a price perspective, the underlying market liquidity is still a cause for worry.
A positive flip in the CMF reading is a necessity for the bullish outlook to solidify because this would mean that there would be stronger buying support and capital inflows.
Without this, the current recovery may be at risk of facing headwinds and may retest lower support levels.
More so, crypto analyst Ali Martinez posted a Cardano (ADA) 4-hour chart that displayed a well-defined descending channel, and the price was trading close to the upper boundary at $0.708.
For a breakout to happen, ADA must decisively break above this resistance, and it fits with the $0.762 supply zone.
This would confirm a bullish reversal to $0.80 as per the recent sharp recovery from the channel’s lower boundary.
Nonetheless, failure to breach this resistance could lead to a rejection, pushing ADA back toward the midline near $0.680 or even the lower boundary around $0.660.
Notably, the breakout attempt will need high trading volume to overcome selling pressure. And validate a trend change, in line with a broader market recovery signal.
Charles Hoskinson Refutes 318M ADA Transfer Claims
In a separate development, Cardano founder Charles Hoskinson has denied accusations of mismanagement of unclaimed ICO funds.
The controversy was sparked when Masato Alexander accused Hoskinson and Input Output Global (IOG) of redirecting 318 million. ADA from unclaimed ICO vouchers without proper transparency.
Hoskinson strongly rejected those allegations, noting that 99.8% of the ADA vouchers had been correctly redeemed on time. While the rest 0.2% had been lawfully donated to the Intersect Foundation.
Hoskinson went on to warn of possible legal action against those propagating lies about the project. He indicated that the protocol upgrade and voucher redemption process was transparent and community consensus-based.
Blockchain analyst Jonathan Morgan agreed with Hoskinson. Saying that more than 300 million ADA had already been returned to the rightful owners. This supported the credibility of Cardano’s governance approach.