Following a week of sideways trading, the native digital asset of the Cardano network, Cardano’s ADA, is set for an upward momentum. During the period of consolidation, ADA formed a bullish pattern which has now been breached.
Factors contributing to the optimistic outlook for ADA include robust confidence from traders and significant players in the market, along with a positive shift in overall market sentiment towards the token.
Analyzing Cardano’s Technical Position and Critical Levels
As per analysis from CryptoCrypto, ADA has broken out of a bullish inverted Head-and-Shoulders pattern in terms of price action.
If ADA manages to break and close a four-hour candle above the $1.07 level, it could potentially surge by 15%, reaching a resistance point of $1.24. Moreover, breaching this level might lead to a further 25% increase, possibly targeting $1.52 in the near future.
On a positive note, ADA’s Relative Strength Index (RSI) implies that the altcoin has enough space for a rally. At the current moment, the RSI is at 60, positioned below the overbought area, which could attract both traders and investors.
Supportive Whale Actions Fueling ADA’s Price Rally
In addition to technical analysis, both traders and long-term holders (commonly known as whales or investors) are actively engaged with the altcoin, as highlighted by Coinglass.
Coinglass’s data on ADA Spot Inflow/Outflow indicates a consistent outflow from exchanges to the whales’ wallets, totaling $203.2 million since November 23, 2024.
In the realm of cryptocurrencies, the outflow of tokens from exchanges is viewed positively, signaling that whales are moving tokens from exchanges to their personal wallets.
Rising Open Interest and Bullish Sentiment
Aside from whale activity, traders are also showing substantial interest. Coinglass’s data reveals that ADA’s Open Interest (OI) has surged by 12.9% in the last 24 hours and 3.75% in the recent four-hour period.
The increasing Open Interest, coupled with significant outflows and positive price movement of ADA, indicates strong backing from the bullish faction. This support has the potential to significantly boost the price in the upcoming days.
At the time of reporting, ADA was priced at approximately $1.07, marking a price surge of more than 6.45% within the past 24 hours.
However, the trading volume witnessed a decline of 30% during the same timeframe, pointing towards reduced involvement from both traders and investors compared to the previous day.