Cardano [ADA] has maintained a price level above a crucial support point of $0.30 on the daily chart. A potential uptrend could propel its value above the resistance level of $0.39.
ADA has been trading within a descending channel since the conclusion of the bullish trend in late March.
Nevertheless, a recent double bottom formation at the price level of $0.31 indicates that Cardano may have reached a low point and could be gearing up for an increase of over 70% if the altcoin market experiences a surge when the Federal Reserve cuts interest rates in mid-September.
Traders might want to consider establishing entry points around the $0.30 range. Should ADA break out of the descending channel in a downward direction, further evaluation will be necessary to gauge future price movements.
The price zone of $0.30 has been tested three times, with the candle on August 5 briefly dipping below the lower trendline.
Impact of Funding Rates and Open Interest
In conjunction with the technical analysis, Cardano observed a 9% price hike following the launch of the Artificial Superintelligence Alliance (FET) token on its blockchain.
The open interest in ADA remains robust, displaying an upward trend on larger timeframes, further reinforcing the potential for higher prices.
Moreover, positive funding rates enhance the possibility of a Cardano price reversal, especially as the overall sentiment in the altcoin market hints at a bullish movement.
As AI-centric cryptocurrencies gain more prominence in the market, the presence of FET on the Cardano blockchain may have a positive impact on ADA’s price over the long haul.
Growth in Cardano’s Active Addresses
The introduction of FET has also stimulated activity on Cardano’s blockchain, with the number of active addresses in ADA reaching a peak in the last five months.
This surge in activity signifies a rising interest and could bolster ADA’s price as more users interact with the platform.
An analysis of the volume of ADA’s active addresses showcases sustained engagement, with intermittent surges, such as the spike witnessed during the market downturn on August 5.
This increasing level of activity reflects a growing bullish sentiment towards ADA.
ADA vs BTC Relationship
The strong correlation between Cardano and Bitcoin further validates the anticipation of a price surge.
Bitcoin continues to be the primary influencer of most major cryptocurrencies, including ADA. A surge in Bitcoin’s price is likely to trigger a similar upturn in Cardano.
Currently, the correlation between ADA and Bitcoin stands at 0.74, up from 0.6, indicating a strengthening connection.
If this trend persists, ADA could approach its historical peak correlation of 0.96, particularly as advancements on its blockchain gain momentum.
With these factors in motion, ADA appears to be well positioned for an uptick in prices in the near term.