- ADA issued strong bullish signals and appeared to be trading near a classic breakout pattern.
- Derivatives data indicates growing trader interest, while critical levels of support and resistance could quickly alter ADA’s trajectory.
Cardano (ADA) saw a massive 270% rally between early November and early December, before reversing from its long-term trendline. However, despite this pullback, the altcoin’s price action remained well above its 20/50/200 day EMAs, highlighting a strong bullish advantage.
While overall market sentiment is still shaky, ADA’s near-term volatility could provide traders with lucrative opportunities.
Can Cardano maintain its bullish advantage?
Source: TradingView, ADA/USDT
ADA maintained strong bullish sentiment by remaining above its 20, 50 and 200 day EMAs, reaffirming strong bullish advantage despite ongoing consolidation.
At the time of writing, the altcoin appeared to be trading near a classic bull flag pattern on its daily time frame. A close above its $1.03 resistance could confirm the breakout of this flag. In this case, bulls could target the $1.21 area, which is near the long-term trendline resistance.
On the other hand, a break below its $0.80 support could invalidate the uptrends. A decline below this level could pull ADA towards its 200-day EMA ($0.62) and stall the uptrend.
The daily Relative Strength Index was hovering around the 52 mark at press time, hinting at slight bullish momentum. A sustained position above the midline can help buyers regain immediate resistance in the coming sessions.
ADA’s 24-hour trading volume surpassed $1.7 billion, marking a nearly 12% price increase over the past day. Such volume increases are generally ideal for short-term trading setups.
The derived data revealed THIS
Source: Coinglass
According to the latest data, open interest in ADA derivatives increased by 16.63% to $739.86 million – a sign that new positions have flooded the market.
While the overall 24-hour Long/Short ratio was near 0.9755, indicating a slightly neutral position, exchange-specific ratios (e.g. Binance ADA/USDT at 2.6127) highlighted a strong uptrend at some traders.
As always, it is wise to follow the broader Bitcoin market sentiment, given the strong correlation between ADA and BTC. Any sudden change in Bitcoin’s price action could quickly influence Cardano’s near-term trajectory.
