Unlocking Profit Potential: Strategies for Traders to Leverage ADA’s Recent Surge
During the period spanning early November to early December, Cardano’s [ADA] value witnessed a remarkable surge of 270%, reaching a peak before retracing from its resistance trendline. Despite the subsequent pullback, ADA’s price continued to hold strong above the 20/50/200-day Exponential Moving Averages (EMAs), signaling a bullish momentum.
Given the current delicate sentiment prevailing in the market, traders may find enticing opportunities in the short-term volatility of ADA.
Assessing Cardano’s Bullish Momentum
ADA has managed to sustain its bullish stance by consistently remaining above the 20-day, 50-day, and 200-day EMAs, reaffirming its bullish trajectory despite the ongoing consolidation phase.
Presently, ADA appears to be consolidating near a traditional bullish flag pattern on its daily chart. A decisive breakout above the $1.03 resistance level could confirm this setup, potentially paving the way for a move towards the $1.21 mark, positioned in proximity to the overarching resistance trendline.
Conversely, a breach below the $0.80 support might invalidate the bullish bias, triggering a potential decline towards the 200-day EMA at $0.62, potentially stalling the uptrend.
As of the latest data, the Relative Strength Index (RSI) on the daily timeframe is hovering around the 52-level, suggesting a mild bullish momentum. Sustained elevation above this midpoint could empower buyers to challenge immediate resistance levels in the near future.
Additionally, ADA’s 24-hour trading volume has surged above $1.7 billion, reflecting a nearly 12% uptick in prices over the previous day. Such spikes in trading activity often present favorable conditions for short-term trading strategies.
Insights from Derivatives Data
Recent data indicates a notable 16.63% increase in ADA’s derivatives Open Interest, reaching $739.86 million, signaling a surge in fresh positions being established in the market.
While the aggregate 24-hour Long/Short ratio remains close to 0.9755, suggesting a relatively balanced sentiment, specific exchange ratios such as the Binance ADA/USDT pair at 2.6127, underscore a pronounced bullish bias among select traders.
It is imperative to monitor Bitcoin’s overall market sentiment closely, given ADA’s significant correlation with BTC. Any abrupt shifts in Bitcoin’s price dynamics have the potential to swiftly impact Cardano’s short-term price trajectory.