Cardano’s native cryptocurrency, ADA, has been steadily recovering from a recent dip that drove its price down to as little as $0.33 earlier in the month.
Over the last seven days, ADA has seen a 1.8% increase, with an additional uptick of 1.3% in the past 24 hours, pushing its current trading price to $0.3584 as of the time of this writing.
This upward movement in ADA’s value is happening amidst a relatively stagnant cryptocurrency market, and the recent positive performance of Cardano has reignited investor interest in the digital asset.
Potential Rally Towards the $0.40 Mark for ADA?
One of the primary factors contributing to this renewed optimism surrounding ADA is the formation of a promising technical pattern on its daily chart.
Having recently bounced back from a critical support area within an ascending triangle pattern, ADA might be gearing up for a bullish breakout.
If this trend persists, ADA could continue its upward trajectory and potentially breach the significant resistance level of $0.40.
For clarity, an ascending triangle pattern is a well-known technical setup suggesting a probable upward breakout. It is defined by a sequence of higher lows forming an ascending trendline, while the upper boundary remains flat.
When an asset repeatedly tests resistance levels but manages to form higher lows, it indicates a rise in buying pressure. Once the price breaks above the resistance, a bullish rally typically follows.
In the case of ADA, the ascending triangle pattern has emerged as the asset encounters consistent rejection within the $0.27 to $0.33 price range, establishing a robust support level.
Following each rejection from this zone, ADA’s price has historically surged, hinting that the asset might be on the brink of another upward movement.
With the most recent rejection from the support area, speculations are circulating about whether ADA could soon make a strong push towards the $0.40 resistance threshold, especially if market conditions become more favorable.
Favorable Fundamentals Back Positive Prospects
In addition to the encouraging technical outlook, the fundamentals of Cardano also support the case for potential price growth. According to data from Santiment, there has been a rise in retail interest in ADA over the past few weeks.
Although the number of active addresses dropped after peaking at 137,000 earlier in the month, it has since rebounded, currently standing at 29,000.
This resurgence in retail engagement might offer additional momentum for ADA’s price, indicating an increasing interest in the asset among individual investors.
Furthermore, as per Coinglass, ADA’s Open Interest has grown by 4.72%, reaching $231.29 million during this period. Despite a minor decline to $261.65 million, the overall increase in Open Interest suggests that traders are positioning themselves for potential price movements in ADA, demonstrating confidence in its short-term prospects.