Cardano Price rises to hit a new 2023 high – where next ADA?

Cardano price was flashing green with 8% gains over the last 24 hours as Ethereum led crypto assets' recovery on Friday. Ethereum was trading above $2,100, up 10% on the day as the expectation of the Shapella upgrade began paying off.

All other top cap non-stablecoin cryptocurrencies were trading with a bullish bias with Bitcoin holding firmly at $30,825 after rallying 2.25% on the day. Dogecoin was also posted an impressive performance with 8.83% gains on the day as Solana rallied 5.78% on the launch of its crypto phone Saga to trade at $25.40.

The ongoing recovery is attributed to the increasing investor confidence in crypto currencies at a time when consumer prices remain high amid runaway inflation across the world. According to data from Alternative, a platform that analyses "sentiments and emotions" around Bitcoin and other cryptocurrencies, the Crypto Fear & Greed Index is in the "Greed" zone.

This means that inventors are getting greedy as the market is rising, driven by the Fear of missing out (FOMO) on any short or long term gains the rallies may bring.

Crypto Fear and Greed Index

As long as the buying continues, prices will continue to increase until overbought conditions kick in.

Cardano Price Bulls Seek A Return To $0.5

At the time of writing, Cardano was trading in an eighth straight bullish session at $0.4413 after rising 16.5% over the last seven days. ADA was also positive on the monthly time frame after rallyin 28% over the last 30 days and traded 80% above its January 31 opening.

Cardano had completed a V-shaped recovery on the daily chart when it broke above the pattern's neckline at $0.4228 on Thursday. ADA now fought immediate resistance from the $0.45 level.

A daily candlestick close above this level would propel the price of the Layer 1 token higher, first toward the $0.472 and later to the $0.5 psychological level. Higher than that, ADA could climb to revisit the $0.5243 range high, representing an 18.54% rise from the current price.

ADA/USD Daily Chart

Supporting Cardano's positive outlook was the upward movement of the Relative Strength Index (RSI) in the overbought region. Its value at 72 reinforced the buyers' grip on ADA.

In addition, the altcoin was sitting on strong support on the downside. One significant area of support was the demand zone between $0.36 and $0.35. Note that this is where the 50-day, 100-day and 200-day simple moving averages (SMAs) sat. Increasing demand pressure from these support levels is likely to bolster the ADA price higher.

On the downside, the RSI showed that Cardano was overbought indicating that a correction was on the cards. As such, ADA could turn down from the current levels toward the $0.42 psychological level. increased selling could see the price lose the $0.40 foothold to revisit the SMAs between $0.36 and $0.35.

Traders could expect Cardano price to take a breather here giving buyers an opportunity to regroup and accumulate more at a discount before making another attempt at recovery.