Cardano (ADA) is currently exhibiting a tight consolidation phase on the daily chart, often a precursor to heightened volatility. At press time, ADA is trading at $0.75, encountering resistance at $0.79. This price structure mirrors its mid-February accumulation phase, suggesting a potential breakout in the near future.
Bullish Market Structure and Increased Liquidity
The overall market structure remains bullish, with strength evident in both spot and futures markets. The probability of a retest of the $0.56 support zone appears low given current momentum. Notably, on March 25, ADA recorded a trading volume of 1.06 billion at $0.74, closely aligning with the February breakout phase that led to a rally toward $1.14.
Additionally, ADA’s recent listing on BingX, a platform with over 10 million users, is expected to enhance liquidity and market depth. This development strengthens the likelihood of a sustained uptrend.
Capital Rotation and Resistance Breakout Prospects
Capital rotation from Bitcoin to Cardano has become increasingly noticeable, with the ADA/BTC trading pair showing a bullish shift. As Bitcoin maintains its steady upward trajectory, risk-on sentiment is driving capital inflows into altcoins, including ADA.
Given these factors, a retest of the $0.80 resistance level appears probable. However, a confirmed breakout remains uncertain due to potential bull traps at key resistance levels, which could lead to distribution-driven reversals.
Derivatives Market Signals Caution
Despite bullish momentum, red flags in ADA’s derivatives market suggest caution. Open Interest (OI) has surged by 4.24% to $834 million, indicating increased leveraged exposure. Additionally, Funding Rates have turned positive for two consecutive sessions, a first for this month, signaling dominance from long traders.
Whale accumulation has intensified, with large holders absorbing 240 million ADA in the past week. This trend echoes the late February expansion phase, which saw OI climb to $1.25 billion, fueling ADA’s rally.
Unlike the previous cycle, trend validation remains uncertain due to macro-driven volatility. To confirm a bullish breakout, ADA must decisively breach the $0.80–$0.85 resistance range. Failure to do so could expose overleveraged long positions to liquidation, triggering a sell-off.
Trump's Tariff War | US President Donald Trump (@realDonaldTrump) has confirmed that #tariffs on #Mexico and #Canada will go into effect later today and that reciprocal tariffs will begin on April 2 pic.twitter.com/Uuzx049xhv
— CNBC-TV18 (@CNBCTV18News) March 4, 2025
Should bulls fail to establish support at resistance levels, a retracement toward the $0.65 demand zone remains a realistic possibility. However, sustained buying pressure could drive ADA toward a stronger bullish breakout in the coming sessions.
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.
Also Read: Cardano Whales Accumulate $175M in ADA – Is a Breakout to $0.85 Imminent?
I’m your translator between the financial Old World and the new frontier of crypto. After a career demystifying economics and markets, I enjoy elucidating crypto – from investment risks to earth-shaking potential. Let’s explore!
