In a promising turn of events, Cardano (ADA) is showing bullish signs, positioning itself for a potential massive rally. The broader market has shifted its sentiment, with major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) gaining significant upside momentum, and now Cardano is following suit. This comes as ADA sees a surge in price and bullish on-chain metrics signal growing confidence among investors.
Cardano’s Price Momentum
Over the past three days, ADA has surged over 10%, trading at around $0.36 at the time of writing. In the last 24 hours alone, ADA jumped 3.8%, fueling optimism that the asset may be on the verge of a breakout. However, despite the price surge, its trading volume dipped by 5%, reflecting reduced participation from traders and investors. This lower volume could indicate caution in the market, even as the broader cryptocurrency landscape experiences a bullish reversal.
ADA is still trading below the 200 Exponential Moving Average (EMA), a key technical indicator that often signals whether an asset is in an uptrend or downtrend. In this case, ADA remains in a downtrend on a higher timeframe, but recent movements suggest the possibility of a breakout. The current price level of $0.365 brings ADA close to the neckline of a bullish cup-and-handle pattern. Historically, this has been a critical resistance level, where the asset has encountered significant selling pressure.
If ADA can breach this neckline and close above $0.367 on the daily chart, it could pave the way for a 20% rally, potentially pushing the price to $0.445. Such a move would likely spark increased buying interest as investors look to capitalize on the bullish sentiment.
Bullish On-Chain Metrics
Cardano’s bullish outlook is further supported by promising on-chain metrics. According to Coinglass, ADA’s Long/Short Ratio stands at 1.034, indicating that traders are leaning bullish. A Long/Short Ratio above 1 typically signals that traders expect prices to rise, and in ADA’s case, this metric suggests confidence in the asset’s short-term performance.
Additionally, ADA’s Futures Open Interest (OI) has increased by 8.5% and continues to rise steadily. Open Interest measures the number of outstanding futures contracts, and an uptick in OI is often seen as a sign of growing trader engagement. When coupled with a Long/Short Ratio above 1, it suggests that traders are building bullish positions in anticipation of further gains.
Further reinforcing this sentiment is ADA’s OI-Weighted Funding Rate, which currently sits at +0.0096%. A positive funding rate indicates that traders are willing to pay a premium to hold long positions, underscoring the dominant bullish sentiment in the market. At present, 50.84% of top traders hold long positions, while 49.16% hold short positions, showing that bulls are taking control of the asset’s direction.
What’s Next for Cardano?
As ADA approaches the critical resistance level at $0.367, market watchers are keen to see if the asset can break through and sustain its upward trajectory. A successful breakout could lead to a 20% rally, driving the price toward $0.445 and solidifying its bullish trend.
With on-chain metrics aligning with technical indicators, Cardano is in a strong position to capitalize on the current market reversal. However, traders should remain cautious, as market dynamics can shift quickly. For now, ADA appears poised for a potential breakout, making it a cryptocurrency to watch closely in the coming days.
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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