Cardano’s ADA has surged 12% over the last three days and is currently testing a crucial resistance level that has limited its upward movement since mid-August.
This upward trend coincides with on-chain data indicating that short-term holders (STHs) have reduced their selloffs, alongside a rise in overall market demand for ADA. These factors could pave the way for a breakout beyond the $0.92 barrier.
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Cardano’s Rally Supported by Genuine Inflows
An analysis of ADA’s Spent Coins Age Band (30d–60d) shows a steady decline since September 16, currently sitting at 47,230 ADA.
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According to Santiment, this metric tracks the movement of ADA coins held in wallets for 30 to 60 days before being spent. Essentially, it indicates whether short-term holders (STHs) are choosing to sell their coins or hold onto them.
An increasing value in this band reflects mounting sell pressure from STHs, as coins kept for a month or two are shifted to exchanges or liquidated.
Conversely, as seen with ADA, a decline suggests a reduction in the number of recently acquired tokens being spent. Since STHs often drive price volatility, their choice to hold diminishes selling pressure and may have contributed to ADA’s notable rally over the past three days.
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Additionally, analysis from the ADA/USD one-day chart reinforces the bullish sentiment toward the altcoin. Its Chaikin Money Flow (CMF) has increased significantly and is now at a 42-day high of 0.11.
The CMF indicator gauges the volume-weighted flow of capital into and out of an asset, with positive values indicating that buying pressure exceeds selling pressure.
For ADA, the significant increase in CMF suggests that genuine inflows are supporting its recent rally, potentially allowing for further upside in the near future.
Cardano Bulls Aim for Breakout, Bears Prepared to Pull Back to $0.84
The reduction in STH selloffs and growing buying interest indicate that ADA is gaining momentum to challenge the $0.92 resistance level. A successful close above this level could propel ADA’s price to $0.98.
However, if the bears regain control, they could push the price down towards $0.84.
