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Cardano (ADA) has staged a significant overnight recovery, climbing by nearly 4% as Bitcoin momentarily touched the $97,000 level. The current price of ADA stands at $0.6784, marking a strong bullish comeback that has seen it reclaim the crucial $0.67 high-volume zone. This resurgence raises the question of whether Cardano can maintain this momentum and breach the $0.72 resistance level that has capped its upward movement since late April.
Bullish Signals Emerge in Cardano Price Analysis
Technical analysis of Cardano’s 4-hour price chart reveals a compelling bullish narrative. The recent price action showcases a strong rebound from a key support trendline, which aligns with the 50% Fibonacci retracement level, providing a robust foundation for the recovery. Consecutive bullish candles have propelled ADA’s price above the 61.80% Fibonacci level at $0.6732, a breakout that also signifies a breach of the previously mentioned high-volume zone. This movement points towards a potential V-shaped reversal in Cardano’s price trend, further supported by a falling wedge breakout pattern.
Derivatives Market Hints at Volatility Amidst Bullish Sentiment
While Cardano experiences this bullish revival, the derivatives market suggests potential for sharp price fluctuations. Data from Coinglass indicates that Cardano’s Open Interest has remained relatively stable around $735 million since late April. The funding rate, currently positive at 0.0065%, reflects an underlying bullish confidence among traders. Notably, projections indicate that a move towards $0.692 could trigger substantial short liquidations totaling $4.46 million across major exchanges. Conversely, a price correction to $0.664 might lead to even larger long liquidations of $5.75 million. This liquidation map paints a picture of a market positioned on a knife-edge, even as the open interest and funding rate lean slightly bullish.
Also Read: Cardano Just Pulled Off a Bridgeless BTC Transfer — Here’s What It Means for DeFi
Path to $0.72 and Beyond: Key Levels to Watch
As Cardano sustains its position above the 61.80% Fibonacci level, buyers are eyeing the $0.7292 resistance as the next significant hurdle. A successful break above this level, which has acted as a ceiling for Cardano‘s price for several weeks, could pave the way for further gains. The positive crossover observed in the MACD and signal lines reinforces this optimistic outlook.
According to Fibonacci extensions, a strong breakout could potentially propel Cardano (ADA) towards the $0.8372 level. However, it’s crucial to monitor the downside, with the ascending trendline and the 50% Fibonacci level at $0.6437 serving as critical support zones that need to hold to maintain the bullish momentum.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
