Cardano (ADA) is trading sideways in a tight range between $0.25 and $0.45, frustrating investors looking for a clear direction. However, this period of low volatility could be the calm before the storm as ADA prepares for a major move in the near future.
ADA is down 0.1% to $0.2895, with $112 million in volume coming in, supported by $10 billion in market capitalization.
Cardano’s price action has been influenced by the ongoing lawsuit between the Securities and Exchange Commission (SEC) and Ripple Labs, which also involves XRP and other cryptocurrencies that the regulator deemed to be securities.
In July, a federal judge ruled that XRP was not a security when sold to the general public on crypto exchanges, giving a boost to ADA and other tokens that faced similar allegations from the SEC.
However, the SEC has appealed the ruling and asked for more time to review the case, creating uncertainty and anxiety in the crypto market. As a result, ADA has failed to sustain its momentum and has retreated from its July high of $0.37 to trade around $0.2895 on Tuesday.
ADA Price Stuck Below Key Moving Averages
Looking at the daily chart, ADA is trading below all three moving averages, namely the 200-day EMA (purple) at $0.343, the 100-day EMA (blue) at $0.316, and the 50-day EMA (red) at $303, indicating a bearish bias.
The MACD indicator is also in negative territory, suggesting that sellers have the upper hand.
A break below the lower boundary of the range at $0.25 could trigger a sharp sell-off towards the next support level at $0.2, where ADA found buyers in June.
On the other hand, a break above the upper boundary of the range at $0.45 could signal a bullish reversal and open the door for a rally toward the next resistance level at $0.6, where ADA faced rejection in May.
ADA Price Could Follow Historical Pattern
Despite the current lackluster performance, ADA investors should not lose hope, as history could repeat itself.
According to crypto analyst and trader Ali, Cardano appears to be mimicking its price action between 2018 and 2020, when it traded between $0.10 and $0.028 for 665 days.
Following this consolidation phase that allowed for accumulation among investors, ADA embarked on a massive bull run of 2,985%, reaching an all-time high of $3.10 in May 2021.
Ali suggests that ADA could follow a similar pattern and break out of its current range after 665 days, which would be around February 2024. If this happens, ADA could surge to $8.95, which would be a 2,985% increase from its current price.
