Amid the current market shift, Cardano [ADA] has shown signs of bullishness and readiness for a substantial surge, fueled by a potential breakout and positive on-chain metrics.
With the overall market sentiment now in favor, leading cryptocurrencies such as Bitcoin [BTC] and Ethereum [ETH] have been witnessing notable upward movements, with Cardano now poised to follow suit.
Cardano’s Price Boost
Over the last three days, ADA has seen a surge of over 10%, trading close to $0.36 at the moment following a 3.8% increase in the past 24 hours.
However, amidst this period, the trading volume for ADA has dwindled by 5%, hinting at reduced involvement from traders and investors during this market turnaround.
Despite the recent price surge, ADA remains below the 200 Exponential Moving Average (EMA), signaling a downward trend on a larger scale.
The 200 EMA serves as a technical tool employed by traders and investors to ascertain an asset’s trend direction.
Despite this downtrend, ADA is hovering close to the neckline of a bullish cup-and-handle pattern at the $0.365 level currently.
Historically, this particular level has been a zone where ADA has encountered substantial selling pressure and seen price reversals.
If ADA manages to breach this neckline or resistance level and successfully closes a daily candle above $0.367, there is a strong likelihood of a 20% rally to hit $0.445.
Positive On-Chain Insights
This optimistic outlook is further reinforced by on-chain indicators. The ADA Long/Short Ratio from Coinglass stood at 1.034 presently, indicating a bullish sentiment prevailing among traders.
In addition, ADA’s Futures Open Interest has climbed by 8.5% and continues to show a steady increase.
Traders and investors commonly consider a rising Open Interest alongside a Long/Short Ratio exceeding 1 as they strategically build their positions.
At the moment, 50.84% of prominent traders hold long positions, while 49.16% have short positions, signaling the dominance of bulls in this scenario.
Moreover, ADA’s OI-Weighted Funding Rate is currently at +0.0096%, pointing towards a bullish sentiment in the market.