Cardano’s (ADA) price has managed a steady 13.5% in March after experiencing a 32% dip in February. The altcoin is still down 15% in Q1, but technical data is beginning to point to the continuation of the recent positive price action.

Cardano (ADA) on verge of 20% breakout as social sentiment indicator hits 4 month high image 0

Cardano 1-day chart. Source: Cointelegraph/TradingView

Despite ADA price moving sideways between $0.78 and $0.70 over the past 10 days, social sentiment related to the altcoin has hit a new year-to-date high.

Cardano’s “bullish” sentiment soars to 4-month high

According to Santiment, an onchain intelligence platform, Cardano’s social sentiment exhibited its highest positive measurement in four months.

ADA investors received a boost from the US Securities and Exchange Commission’s (SEC) recent comments , which classified Cardano’s use case as “smart contracts for government services.” The SEC statement was followed by ADA’s highest ratio of positive comments since the first week of November 2024.

Cardano (ADA) on verge of 20% breakout as social sentiment indicator hits 4 month high image 1

Cardano’s crowd sentiment score by Santiment. Source: X.com

A rise in social sentiment is often aligned with increased trading activity and, at times, higher prices. In Q4 2024, a rise in positive social sentiment and active transactions went hand in hand for ADA. However, the environment is slightly different right now.

Data from Cardanoscan.io showed a stark difference between the number of active transaction counts from early November 2024 and now. In Q4, the average transaction count remained above 100,000 for most of November and December, but currently, it is roughly down 70%, with the number of transactions coming in at 26,437 on March 18.

Cardano (ADA) on verge of 20% breakout as social sentiment indicator hits 4 month high image 2

Daily transaction count and fees chart. Source: cardanoscan.io

Regardless of the weak onchain activity, Michael Heinrich, CEO of 0G Labs, told Cointelegraph that Cardano’s strength lies in “lobbying” its community. Speaking on ADA and XRP’s inclusion in a US Digital Asset Stockpile, Heinrich said,

“They have time in the game: these tokens have been around for a while, they’re liquid, and they’re unlikely to spring any sudden surprises.”

Related: Cardano’s ADA lands spot in US Digital Asset Stockpile — Will it generate value?

ADA to rally 20% before the end of March?

Irrespective of the underwhelming onchain data, ADA price has been receptive to positive news in the past.

The altcoin has maintained a position above the 0.50 Fibonacci retracement line despite ADA being in a downtrend since its 2024 high of $1.32. This indicates that ADA’s high-time frame (HTF) chart remains on a technical uptrend.

Cardano (ADA) on verge of 20% breakout as social sentiment indicator hits 4 month high image 3

ADA/USDT 1-day chart. Source: TradingView

Cardano retained support from the ascending trendline (black line) while oscillating between its parallel channel. Currently, the immediate resistance lies at the upper range of the channel at $0.78, which is supported by the 200-day exponential moving average (200-DEMA, orange line). A positive candle close above the 200-DEMA on the daily chart indicates a bullish shift, potentially triggering a move above $0.78.

The immediate target above $0.78 lies between 0.84 and $0.88, where a daily fair value gap (FVG) is present. A retest of $0.88 marks a 20% return from its current price.

However, historically, Cardano has exhibited prolonged sideways movement, which could limit immediate gains. A break above $0.78 validates further confirmation for a rally, but until then, the altcoin may continue to range between $0.78 and $0.70.

Related: Bitcoin is just seeing a ‘normal correction,’ cycle peak is yet to come: Analysts

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.