Cardano price rebounds after touching $0.64 low on May 6.
Custom risk model shows Cardano at “Moderate Buy” level of 37.
On-chain metrics show growing network activity with 11.99% more active addresses. Cardano’s price action has shifted noticeably over the past week, with recent movements pointing to a potential change in market sentiment. After beginning the week around $0.70, ADA dipped to a local low near $0.64 on May 6 before staging a recovery toward $0.72 by May 8.
The token has posted a 8% gain in the last 24 hours. While these short-term moves show positive momentum, a new risk assessment model suggests the true Cardano bull cycle may still be in its earliest phases.
Cardano risk model indicates favorable entry zone
Crypto Capital Venture founder Dan Gambardello recently applied a custom risk model to evaluate current ADA market conditions. This review indicates that Cardano’s Long-Term Risk Score is currently 37, which is categorised as a “Moderate Buy” under the model.
Risk levels are ranked by the model from low to high. Early phases of the market cycle are typically represented by lower levels. For comparison, the risk level was in the 50s and 60s during Cardano’s bull runs in 2017–2018 and 2020–2021, respectively, which saw notable price increases.
During the past two bull cycles, ADA’s risk level began in the 30s, remained constant for a while, and then rose very quickly as interest gained momentum. The token surpassed $1 in the 2017 cycle and reached well above $3 in 2021.
Today, ADA costs $0.71, 77% less than its 2021 high of $3.09. This price and a moderate risk score are interpreted by Gambardello as a purchasing opportunity. He believes that the Cardano bull market is still in its early stages and will soon come to an end.
The analyst has further noted that in comparison to Ethereum with a lower Long Term Risk Score of 24, ADA appears to be better positioned for potential gains.
The risk model holds promise in the long term but Ali Martinez’s technical analysis presents issues in the short term. Martinez posted a 4-hour candlestick chart that indicates a declining parallel channel dictating ADA’s action for the past fortnight.