The recent legal victory of Ripple (XRP) against the U.S. Securities and Exchange Commission (SEC) has sent shockwaves throughout the cryptocurrency market. Cardano (ADA), in particular, has experienced a significant surge in price, with traders speculating on the potential implications of this ruling. This article aims to analyze the impact of Ripple’s legal win on Cardano’s price movement and explore the various factors that may shape its future trajectory.
Following the federal judge’s ruling on July 13, deeming XRP sales on public crypto exchanges compliant with U.S. securities laws, cryptocurrencies accused of being securities have found new grounds for defense. ADA, which suffered a severe setback in June after being classified as a security in the SEC’s lawsuits against popular exchanges Binance and Coinbase, has now managed to recover most of its losses. This sudden resurgence can be attributed to the optimism generated by Ripple’s legal victory, fueling renewed investor confidence in ADA.
While ADA’s price soared in the past 24 hours, the behavior of whales, who hold a significant amount of ADA, remains a subject of interest. Data indicates a notable increase in the number of daily ADA transactions surpassing $100,000, indicating heightened activity among large holders. Surprisingly, the ADA supply held by the 100,000-100 million ADA balance cohort remained stable during the price rally. On the other hand, the 100 million-1 billion ADA balance cohort experienced a significant surge in holdings, potentially due to the decline in the 1 billion-infinity ADA token cohort. This suggests that the wealthiest ADA holders may have been redistributing their holdings during this period of price volatility.
From a technical standpoint, ADA’s rapid rally has pushed it into the “overbought” territory, as evidenced by the daily relative strength index (RSI) crossing above 70. In addition, ADA/USD faces resistance at a multi-month trendline and the 200-day exponential moving average (200-day EMA) around $0.35. These factors may limit ADA’s upside potential and increase the likelihood of a consolidation or correction phase in the coming days. If the bears gain control, ADA’s price could test support levels at $0.32, which previously held strong during various periods from October 2022 to March 2023. Further selloffs could potentially drive ADA down to $0.30, representing a 12.5% decline from current price levels.
On the other hand, proponents of ADA’s bullish case point to a potential double bottom pattern forming on the weekly candle chart. This pattern entails the price forming two consecutive local lows followed by a sharp rebound towards a common neckline resistance. If ADA manages to break above this neckline, it could rally by as much as the pattern’s maximum height, implying a potential price target 150% higher than current levels. In this scenario, optimistic Cardano bulls may set their sights on a price target of $0.45 by the end of 2023.
The implications of Ripple’s legal win have reverberated throughout the cryptocurrency market, and Cardano has emerged as one of the notable beneficiaries. The renewed optimism surrounding ADA’s classification as a security, along with increased whale activity, has fueled its recent price surge. However, technical indicators suggest the possibility of a consolidation or correction phase in the near future. Nonetheless, the formation of a bullish double bottom pattern presents an alternative scenario that could propel ADA to new heights. As the market continues to react and adapt to evolving legal developments, Cardano’s price trajectory will undoubtedly be shaped by both short-term market dynamics and broader regulatory trends.
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