Why is Cardano (ADA) price up today?

Cardano (ADA) continued its uptrend on Dec. 3, rising 17% over the last 24 hours to trade at $1.27. The over 280% price growth since Nov. 5 has seen the layer-1 token rise to a 32-month high of $1.32.

Let’s explore why the ADA price is up today.

ADA reenters top-10 cryptocurrencies

ADA has rallied more than 32% over the last seven days and 273% over the last month, reaching $1.32 for the first time since January 2022. With an accompanying growth in its market capitalization, the token has cemented its position among the top 10 largest cryptocurrencies by market value.

The token’s market cap now exceeds $44 billion, and ADA now ranks behind BNB Chain’s BNB and Dogecoin (DOGE).

It is now valued more than USDC (USDC), a 1:1 dollar-pegged stablecoin, which has slipped to ninth place with a market value of $39.9 billion, and Avalanche (AVAX), now ranked 10th with a market value of $20 billion. 

Meanwhile, ADA’s futures open interest (OI) surged to a 40-month high of $1.18 billion on Dec. 3, according to CoinGlass data. 

Open interest is the total number of outstanding contracts in a derivatives market. An increase in OI, accompanied by price growth, signifies confidence in the uptrend.

ADA’s spot exchange volume and net flow data align with today’s bullish performance, showing increased trading and exchange inflows in the past 24 hours.

Whale accumulation backs ADA price

Cardano whales took advantage of the drop to $0.875 on Nov. 26. Data from IntoTheBlock shows that whale addresses holding between 10 million and 100 million ADA have increased sharply throughout November. Over the last week, these large investors have accumulated approximately $276 million worth of ADA. 

This buying appears to be the momentum behind ADA’s move above the $1.30 psychological level, as ADA’s large holders believe in higher prices ahead.

Cardano’s Mean Coin Age metric provides valuable insight into the token’s holder behavior. While ADA’s extraordinary performance in November triggered significant profit-taking activity, the last seven days have seen a notable shift in this pattern, as shown in the figure below.

The metric’s upward trajectory suggests that long-term holders prefer maintaining their current positions. This suggests investor behavior could shift from profit-taking to accumulation once again.

Noted: Cardano founder predicts Bitcoin DeFi will dominate crypto within 3 years

Strong support for ADA on the downside

With ADA price trading at $1.27, traders appear to have established a strong demand zone around the $1.20 price.

Data from IntoTheBlock shows that between $1.17 and $1.21, over 79,580 ADA addresses had moved 197.86 million ADA tokens for an average price of $1.19.

The same IOMAP chart above shows that ADA sits on relatively strong support on the downside compared to the resistance above.

This view is echoed by pseudonymous technical analyst Sssebi, who says that there is not much resistance for ADA after it broke a key resistance level at $1.25, retesting it and switching it into support in the four-hour timeframe.

“$ADA is getting ready for another leg up.”

Zooming out, the technical setup reveals that ADA has broken out of a multiyear downtrend. The weekly chart below shows that the 200-period simple moving average (SMA) at $0.76 is another area of strong support for the ADA price. 

The moving average convergence divergence (MACD) indicator continues its upward trajectory in the positive region.

The bullish signal that occurred during the week ending Nov. 8 when the MACD line (blue) crossed above the signal line (orange) is still in play, suggesting that the market conditions still favor the upside.

If ADA/USD sustains the uptrend, the $2.40 level represents the next big target for the bulls.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.