Cardano (ADA) has been making waves recently, demonstrating notable price movement and resilience. As of the latest update, ADA is trading at $0.3409, marking a 2.68% rise in just 24 hours and an impressive 4.44% increase over the past week. This upward trend has drawn attention to ADA’s technical setup and market sentiment.
Key Support Level Remains Strong
Currently, ADA is building bullish momentum from a critical support level at $0.3172. This level has served as a robust psychological barrier for weeks, providing a foundation for the recent price surge. The price action on the chart suggests consolidation within an ascending triangle pattern, hinting at potential future gains.
However, ADA is approaching a significant downward trendline that extends back to early 2024. Despite multiple attempts, Cardano has yet to achieve a decisive breakout above this resistance. A successful breach of this trendline, combined with the steadfast support at $0.3172, could herald a bullish reversal.
Technical Indicators Show Promise
The chart reveals a descending trendline characterized by a series of lower highs. Despite this, the stochastic RSI is showing a bullish crossover, with the RSI emerging from oversold conditions. This bullish divergence signals a potential short-term rally, as market momentum shifts in favor of the bulls.
Exchange net flow data from Coinglass highlights a favorable trend for Cardano. ADA outflows have significantly outpaced inflows, suggesting that investors are increasingly moving their ADA tokens off exchanges and into cold storage. This behavior is typically seen as a bullish sign, indicating a reduced likelihood of short-term selling.
AMBCrypto’s analysis of liquidation heatmap data also provides a bullish outlook. The key zone of liquidation pressure lies between $0.34 and $0.36. This suggests that short positions are under strain, potentially driving upward price action as bears are forced to liquidate their positions.
Also Read: Should Cardano Burn $513M In ADA? Community Divided Over 1.5B Token Fate
Long-Short Ratio Favors the Bulls
Further adding to the positive sentiment, the Cardano long-short ratio currently stands at 1.31, with a noticeable increase in long positions. This shift indicates that the market sentiment is skewed towards a bullish outlook.
With the combination of a strong support level, positive technical indicators, favorable exchange net flows, and easing liquidation pressure, Cardano is well-positioned for a potential breakout. If ADA can maintain its hold above the $0.3172 support and overcome the downward trendline resistance, the path to further gains appears promising. As always, investors should remain vigilant and watch for key technical developments as Cardano navigates this critical juncture.
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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