Cardano (ADA), the native token of the Cardano blockchain, is showing signs of a potential price recovery following a critical test of its support levels. After experiencing a sharp decline, ADA found itself at the crucial $0.65 level, where traders initially feared further losses. However, a green candlestick formation has shifted market sentiment, indicating a possible bullish turnaround.
Market Momentum and Price Action
ADA has witnessed renewed buying pressure at the $0.65 support zone, a historically significant level for price reversals. On the four-hour chart, the cryptocurrency has printed two consecutive green candles, suggesting an emerging bullish trend. As of the latest data, ADA is trading around $0.69, registering a slight 0.85% decline over the past 24 hours. Despite this minor dip, the trading volume has surged by 85%, signaling increased participation from traders and investors.
Technical Indicators Point to a Bullish Rebound
Technical analysis suggests that ADA is forming a bullish morning star candlestick pattern on the four-hour timeframe, a classic reversal signal. If the asset maintains support above the $0.65 level, analysts predict a 21% rally, potentially pushing ADA to $0.83 in the short term.
Additionally, the daily chart displays a bullish divergence, reinforcing the possibility of a strong rebound. However, if ADA fails to sustain its momentum and closes below $0.65, a further drop to $0.45 remains a possibility, representing a 30% decline from current levels.
Liquidation Levels and Trader Sentiment
According to on-chain analytics firm Coinglass, trader sentiment is shifting as market participants transition from short to long positions. Data from ADA’s exchange liquidation map reveals that traders are heavily leveraged at $0.695, with $3.70 million worth of short positions. Conversely, bulls have built significant long positions totaling $19.50 million at the $0.62 level, further reinforcing strong support.
With rising trading volume and a favorable technical outlook, ADA could be on the verge of a major price recovery. However, traders should monitor key support and resistance levels to navigate potential volatility in the market.
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.
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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.
