Cardano [ADA] is steadily displaying signs of recovery following a recent decline that drove its value down to as little as $0.33 earlier this month.
Within the last week, ADA has surged by 1.8%, with an additional increase of 1.3% in the past 24 hours, elevating its current trading price to $0.3584 as of the time of this writing.
This upward movement in price comes at a time when the wider cryptocurrency market has been striving to regain momentum, and the positive trajectory of Cardano has reignited investor interest.
Is ADA Poised for a Breakout to $0.40?
One primary driver behind this renewed optimism surrounding ADA is the technical pattern emerging on its daily chart.
Recently, the asset has rebuffed a crucial support zone within an ascending triangle pattern, indicating a possible bullish breakout on the horizon.
If this pattern holds, ADA could potentially continue its upward trend and reach the next significant resistance level of $0.40.
An ascending triangle pattern is widely recognized in technical analysis as a formation signaling a potential upward breakout.
This pattern is defined by a sequence of higher lows, shaping the ascending trendline, while the upper boundary remains flat.
When an asset repeatedly tests resistance levels but manages to form higher lows, it indicates rising buying pressure. A breakout above the resistance typically leads to a rally.
In the case of ADA, the ascending triangle pattern has materialized as the asset encounters consistent rejection within the $0.27 to $0.33 price range, establishing a robust support level.
Following each rejection within this zone, ADA’s price has historically surged, suggesting that the asset may be gearing up for another upward movement.
With the recent rejection from the support zone, speculation is arising about whether ADA is on track to surge towards the $0.40 resistance level, particularly if market conditions become more favorable.
Favorable Fundamentals Reinforce Positive Prospects
While the technical analysis implies a bullish trend continuation, Cardano’s fundamental factors further bolster the argument for price appreciation. Santiment’s data indicated a rise in retail interest in ADA over the past few weeks.
Although the number of active addresses saw a decline after peaking at 137,000 earlier this month, it bounced back to 29,000 at the time of this update.
This revived interest from retail investors could offer additional support for ADA’s price, reflecting a growing attraction to the asset among individual traders.
Additionally, according to Coinglass, ADA’s Open Interest had surged by 4.72% to reach $231.29 million during this period. Nevertheless, it experienced a slight dip of 0.69% to $261.65 million.
Despite this slight setback, the overall increase in Open Interest indicated that traders were positioning themselves for further price movements in ADA, showcasing confidence in its short-term potential.