Cardano price has been in a strong rally. However, a closer look shows that it is extremely overbought and that the price could pullback.
The Cardano price has been unstoppable lately. The ADA price has risen for the past six consecutive days and by 92% in the past 7 days. This surge has brought its total market cap to more than $25 billion, making it the fourth-biggest cryptocurrency in the world after Bitcoin, Ethereum, and Tether. It has also displaced Polkadot and Ripple.
Cardano news: Cardano price has surged recently because of the overall strong performance of cryptocurrencies in the past few days. This surge started when Elon Musk revealed that Tesla had bought about $1.5 billion worth in Bitcoin.
The company will also start accepting Bitcoin in the future after getting regulatory approvals. In most cases, a surge in Bitcoin usually leads to a rally of other digital currencies.
There are other reasons why ADA price has rallied. First, Cardano recently completed its Mary hard fork meaning that it is getting close to its Goguin era. That was the first of two hard forks that are scheduled. Later this month, another upgrade will come online, transforming Cardano into a majo player in the DeFi ecosystem.
Cardano price outlook
A few weeks ago, I wrote that ADA was on the cusp of a bullish breakout to $0.46. The result was better than that as the currency soared to an all-time high of $0.833. On the daily chart, the currency is still above the moving averages. It also completed its bullish pennant formation that I wrote about earlier.
However, oscillators like MACD and the Relative Strength Index (RSI) shows that the price is getting overbought. Therefore, while the uptrend to $1 will likely continue, we should not rule-out a healthy correction in the near term. If it happens, the level to watch will be $0.60.