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Cardano is trading at a crucial supply level that could spark a significant rally to new highs. After last week’s interest rate cut, optimism increased among analysts and investors, with many expecting strong bullish momentum for the altcoin.
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This positive sentiment is reflected in spot trading and the futures market, where key data from Coinglass reveals a bullish trend. The key indicator of market sentiment, the funding rate, suggests traders are positioning themselves for a possible breakout.
If Cardano breaks above its current resistance, a 20% surge is expected, potentially pushing the price to levels not seen in months. This breakout could solidify the altcoin’s uptrend and pave the way for further gains.
As the price approaches this critical resistance, investors closely watch for signs of increasing volume and momentum, which would confirm the strength of the uptrend. With market sentiment changing and technical indicators aligning, Cardano appears poised for a significant move.
Cardano On-Chain Metrics Suggest a Breakout
Cardano has surged more than 15% since last week’s interest rate cut announcement, fueling speculation about a possible new season in the crypto market this year. The market as a whole is becoming optimistic and key data from Coinglass supports this sentiment, showing a positive funding rate of 0.01%.
This rate indicates that traders are paying a premium to maintain long positions, reflecting their anticipation of a possible rise in ADA prices. A positive funding rate generally suggests a bullish market outlook, as it shows that traders are willing to incur additional costs to hold their positions, awaiting further price appreciation.
As Cardano approaches its crucial resistance level at $0.40, market sentiment points to a potential breakout. If price maintains its current momentum and breaks through this key resistance, analysts expect an aggressive rise to new highs.
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Investors are watching this level closely, as a successful breakout could lead to a rapid 25% rally towards the $0.50 mark. This scenario would mark a significant recovery for ADA and reinforce the growing belief that altcoins, led by Cardano, could outperform in the coming weeks.
The market, however, remains cautious. Although current sentiment and data suggest a bullish outlook, price must maintain its bullish momentum to validate these predictions. Failing to break above the $0.40 resistance could result in a period of consolidation or even a short-term retracement.
As the crypto community eagerly awaits ADA’s next move, the next few days will be crucial in determining whether Cardano can capitalize on this renewed optimism and kickstart a broader altcoin rally.
ADA Price Action: Key Levels to Watch
ADA is now trading at $0.39, hovering around a key resistance level that has not been breached since late July. The price is within 5% of the 200 daily exponential moving average (EMA) at $0.41.
This EMA has served as an important resistance level since mid-April and now aligns with a crucial supply zone, making it a pivotal point to continue Cardano’s bullish momentum.
For the bulls to gain momentum and establish a stronger uptrend, ADA must reclaim the 200 EMA and decisively move above the $0.40 resistance. This would signal confirmation of a daily uptrend and could pave the way for a sustained recovery towards higher price levels.
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However, a deeper correction could follow if ADA fails to break current resistance and establish a new high. A pullback to lower demand levels around $0.35 would be the likely scenario as traders look for support ahead of any potential rebound. The next few days will be crucial in determining whether Cardano can break this resistance and establish a more bullish trajectory or whether a retracement is imminent.
Featured image of Dall-E, chart by TradingView
