ADA price is showing a stronger market structure after recovering from its previous lows, but a major resistance level still needs to be cleared before the latest uptrend can be considered a confirmed breakout. At the same time, rising Cardano network activity is providing additional context for the current market setup.
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ADA Price Needs a Confirmed Breakout
ADA price has improved considerably from its previous lows, but crypto analyst Giannes Andreou says the recovery still needs a genuine breakout to confirm a stronger continuation.
According to Andreou, ADA has maintained an uptrend since forming its bottom, meaning the short-term structure has improved compared with previous months. However, the token recently attempted to break a major resistance level and failed.
The failed move produced what the analyst described as a swing failure pattern (SFP). An SFP occurs when price briefly moves beyond a key level before reversing back, making the reaction around resistance particularly relevant for the next stage of the ADA price structure.
Andreou’s view is that the breakout should not be considered confirmed simply because ADA has tested resistance. Instead, the cryptocurrency needs to close a candle above the level before the move can be validated.
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Retest Could Define the Next ADA Move
The next step after a breakout is also important. Andreou highlighted the need for ADA to retest the former resistance and hold it as support.
This creates a straightforward technical sequence for traders to monitor. First, ADA needs to close above the major resistance. Second, the price would need to return to the breakout area without losing it. A successful retest could strengthen the case for continuation, while another rejection would leave the market structure unconfirmed.
Source: Giannes Andreou X Post
This is important since the latest recovery is not enough for ADA to have already embarked on the breakout period.
However, the history of the overall price structure is also worth considering. According to Andreou, Cardano was once a lower low compared to the 2022 price action. This implies that the present short-term price structure must be analyzed amid the larger historical price action.
Cardano Activity Adds Market Context
Although the technicals still center around the resistance level, Cardano’s network actions serve as another metric that will help determine the future price forecast of ADA.
Based on the data provided by Cardanians, there has been a 65% increase in Cardano’s monthly active addresses within 30 days to about 328,000. An increase in monthly active addresses is an indication of increased wallet activity on the network but does not necessarily mean that ADA will go up or down.
In addition, recent network activity has been witnessed in various Cardano apps. The Cardano transaction leaderboard has witnessed almost 297,500 transactions being monitored within 30 days, up to September 16. The largest proportion of transactions within the monitored categories was observed in decentralized exchanges.
Source: Cardanians X Post
Such statistics also add further information regarding the rise in active addresses on a monthly basis. Higher numbers of people involved in using the applications mean higher levels of network participation, although both active addresses and transactions should be analyzed along with other parameters.
What Happens Next for ADA Price?
The price for ADA is currently reaching an important technical level of decision-making. While the price action since the low is structurally better, the resistance level that Andreou points out remains the crucial challenge.
The formation of a confirmed higher high through the resistance level, followed by a retest, will provide more technical assurance about the breakout’s sustainability. Until that happens, the recent rally can only be regarded as a breakout attempt.
In any case, the increase in Cardano’s monthly active addresses to 328,000 is another good ecosystem metric. However, increased activity does not necessarily mean that there will be a price breakout.
Concerning ADA, the relationship between resistance, breakout confirmation, retests, and network activity will probably play a key role in the next development stage of the market structure.
Also Read: ADA Price Could Make a Bounce to $0.23 as Cardano Ecosystem Grows
This article contains market analysis and price predictions. These are not guarantees. Crypto markets are volatile. Always DYOR. Not financial advice.
