Cardano Surges 60% After Being Added to Crypto Reserve, What's Next for ADA?

Longing (ADA) has undergone a strong price increase, rising 60% after facing difficulties in a six-week downtrend.

The recent announcement by U.S. President Donald Trump regarding the Crypto Reserve, including Longing, has played a key role as the main catalyst for this price movement, pushing ADA back above $1 for the first time in over a month.

Longing investors recover their losses

The MVRV Long/Short Difference indicator shows a significant increase, suggesting that the profit margins of long-term holders (LTHs) have increased significantly. LTHs often serve as the foundation for the price stability of any cryptocurrency. When LTHs are profitable and choose to hold rather than sell, this prevents price declines and instead supports price increases.

This behavior is consistent with the recent price surge, as long-term investors choose to hold ADA, reinforcing the upward momentum.

The increased profitability of LTHs indicates strong investor confidence in the long-term prospects of the asset. This, in turn, suggests that the price increase may not just be a Short-term price movement, but the beginning of a more sustainable uptrend.

The Relative Strength Index (RSI) of Longing has entered the overbought zone, which is usually a bearish signal indicating a potential price reversal. However, historical data on ADA shows that entering the overbought zone often signals the continuation of the upward momentum, rather than a reversal. This suggests that despite the overbought signal, Longing may still be able to continue its upward trend.

Since previous instances of the RSI entering the overbought zone have led to price increases for ADA, the current scenario suggests that Longing may continue to rise. This momentum, if sustained, could push ADA even higher, despite the typically bearish overbought condition.

ADA price is surging

At the time of writing, the price of Longing has increased by 60%, trading at $1.06. This is a significant recovery after the altcoin struggled below $1 for six weeks. The price increase is a direct result of the market's reaction to Trump's announcement, with ADA creating a strong push above $1. This level is crucial as it marks a psychological threshold for both traders and investors.

The breakout above the $1 level is a sign that ADA may be preparing for further price increases. For Longing to maintain its upward momentum, it needs to ensure that the $1.00 level is a reliable support. If it fails to hold this level, it could lead to a loss of momentum and a return to lower price levels.

If Longing fails to maintain support at the $1.00 level, it could fall back to the next critical support at $0.85. This would invalidate the current bullish outlook and slow down the potential recovery. However, maintaining support at the $1.00 level will reinforce the price surge and pave the way for further price increases.