Cardano (ADA) is eyeing a potential breakout from its recent trading pattern, as it hovers above a critical support level around $0.30. With ADA’s price action suggesting a possible rally, investors are watching closely to see if the altcoin can overcome a key resistance level at $0.39.
Since the end of the March bull run, ADA has been confined within a descending channel. However, recent technical signals offer hope for a turnaround. A notable double bottom formation at the $0.31 mark hints that ADA might have reached its nadir, setting the stage for a possible surge of over 70% if the altcoin market experiences a boost following a Federal Reserve interest rate cut expected in mid-September.
Traders are advised to consider entry points around the $0.30 range. A crucial factor to monitor is whether ADA maintains its position above this support level or breaks downward from the descending channel, which could necessitate further analysis to gauge future price movements.
Funding Rates & Open Interest
Cardano has seen a 9% price increase following the introduction of the Artificial Superintelligence Alliance (FET) token on its blockchain. This development has buoyed ADA’s outlook, with strong open interest on higher timeframes reinforcing the potential for upward momentum. The positive funding rates further support a price reversal, particularly as the broader altcoin market seems poised for a bullish shift.
The presence of AI-based cryptocurrencies like FET on the Cardano blockchain could positively impact ADA’s price in the long run. Moreover, Cardano’s active addresses have surged to a five-month high, driven by increased engagement with the platform. This uptick in activity underscores a growing interest in ADA, potentially bolstering its price as user involvement ramps up.
Also Read: Cardano [ADA] Surges 10% After Hoskinson’s Response, But 76% Of Holders Still In The Red
ADA’s Correlation with Bitcoin
Cardano’s price trajectory is also influenced by its correlation with Bitcoin. Currently, ADA exhibits a strong correlation of 0.74 with Bitcoin, an increase from 0.6. Given that Bitcoin often drives the performance of major cryptocurrencies, a rise in BTC’s price could trigger a corresponding surge in ADA.
As Cardano trades above its crucial $0.30 support, the potential for a significant price rally looms large. The recent technical patterns, combined with the positive developments surrounding the FET token and increased blockchain activity, paint a promising picture for ADA. Investors should keep an eye on these indicators as ADA aims to break through its resistance levels and capitalize on the anticipated market movements.
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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