Cardano price has remained highly volatile this week as the recent bull run ran out of steam. ADA token was trading at $1.10, mirroring the performance of most altcoins. So, does it have more room to run?
Cardano price technical analysis
The weekly chart shows that the price of ADA has been in a strong bull run in the past few weeks. It rose for five consecutive weeks, which pushed it to the highest level since January 2022.
This week, however, the coin is on track to have its first red weekly candle. If it ends the week like this, there is a risk that the bull run has either ended or paused.
The ongoing pattern is known as a hanging man, which is characterized by a long lower shadow and a small body. In most cases, such as what is happening this week, the pattern does not have an upper shadow.
This pattern often results into a strong bearish breakout if it forms during an uptrend. Therefore, Cardano price needs to end the week above $1.1957, where it started the week at.
On the positive side, a pullback at this point is not all that bad since Cardano needs to retest the key support at $0.8030, its highest swing on March 11 to continue the bull run. This process is known as a break and retest, and is one of the most popular signs of a bullish continuation.
Therefore, a clear red alert will happen if Cardano drops below the support at $0.8030. On the other hand, a close above the year-to-date high of $1.3157 will point to more gains, and raise the odds of Cardano soaring to a high of $3, its all-time high.
Cardano’s network is doing well
A potential catalyst for Cardano price going forward is that the network is doing well. For example, it has become the first blockchain network to have a referendum vote on its constitution. Members of the community voted in favor of that constitution almost two weeks ago.
The total value locked in Cardano’s network is sitting near its all-time high. It stands at about $597 million, lower than the record high of over $600 million that it reached a week ago. The biggest players in the ecosystem are Liqwid, Minswap, Indigo, and Splash Protocol.
The DeFi TVL has soared because of the rising ADA price. In ADA terms, the volume has remained stable around 610 million ADA. Still, historically, the DeFi TVL and DEX volume tends to have a minimal impact on the price.
