Cardano (ADA) has been on an upward trajectory, with a potential breakout looming as the altcoin approaches a critical resistance level at $0.40. A 10% rise in ADA’s price would push it past this barrier, but the key question remains: will this breakout attempt succeed, or will history repeat itself with another failed attempt?
ADA’s Horizontal Channel And Key Support-Resistance Levels
Since August 1, ADA has been trading within a horizontal channel, a pattern where the price fluctuates between established support and resistance. In this case, ADA has faced strong resistance at $0.40 and support at $0.31. Over the past week, ADA’s price spiked by double digits, pushing it closer to the channel’s upper boundary at $0.40. This surge reflects growing demand for the altcoin and has sparked renewed optimism among investors.
Several technical indicators are signaling that ADA may be primed for a breakout. One such metric is the Relative Strength Index (RSI), currently standing at 57.25. The RSI measures market momentum, and a value above 50 suggests that buying pressure is outweighing selling pressure. This bullish momentum indicates that market participants are accumulating ADA in anticipation of a potential rally.
Further supporting this optimistic outlook is ADA’s positive funding rate, currently at 0.008%. A positive funding rate suggests that traders are paying a premium to maintain long positions, reflecting the broader market’s expectation of a price increase. These bullish signals suggest ADA may have the momentum needed to breach the $0.40 resistance level.
Can ADA Break Through $0.40?
Cardano’s chances of breaking through $0.40 are bolstered by another key indicator: the Elder-Ray Index’s bull-bear power. With bull-bear power currently at 0.02, the metric suggests that buying pressure is outpacing selling activity. This is a crucial signal, as it reflects increasing demand for ADA and hints at a possible price breakout.
If the buying momentum continues and ADA breaks through the $0.40 resistance level, the next target could be $0.47, a price last seen in June. However, if ADA fails to break out, it risks falling back to the $0.31 support level, continuing its range-bound trading within the horizontal channel.
What’s Next For Cardano?
Cardano’s near-term future hinges on whether it can break through the $0.40 resistance. The altcoin has only tested this level once in recent months, and the outcome of this breakout attempt will likely shape ADA’s trajectory. Investors will be closely watching the price action over the coming days to see if bullish momentum can sustain itself or if ADA will retreat to its lower support level.
Also Read: Cardano (ADA) Eyes Breakout – Can 2.21% Price Surge Offset Whale Exits?
In the coming weeks, ADA’s price movements will likely be driven by broader market sentiment and technical signals. If the altcoin can maintain its positive funding rate and bullish momentum, a breakout could be imminent. For now, traders remain cautiously optimistic, with hopes that ADA can finally escape its horizontal trading channel.
Cardano is on the cusp of a major breakout, with strong technical indicators suggesting a potential price rally. A successful breach of the $0.40 resistance could push ADA toward $0.47, offering significant upside for investors. However, failure to break out could see the altcoin slip back to $0.31. With market sentiment leaning bullish, all eyes are on ADA to see if it can finally break free from its recent trading range.
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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