Cardano (ADA) Aims for 20% Surge as Demand Increases

Este artículo también está disponible en español.

Cardano is currently positioned at a pivotal supply zone that may trigger a major rally towards unprecedented heights. Following last week’s cut in interest rates, there has been a surge of optimism among analysts and investors, with many expecting robust upward movement for this altcoin.

This optimistic outlook is mirrored in both spot and futures trading, as key data from Coinglass indicates a bullish sentiment. The funding rate, a crucial market sentiment indicator, shows that traders are preparing for a possible breakout.

Should Cardano surpass its existing resistance, a surge of approximately 20% is anticipated, possibly bringing the price to levels not observed in months. This breakout could reinforce the altcoin’s upward trajectory and set the foundation for increased gains.

As the price nears this critical resistance level, investors are keenly watching for indications of heightened volume and momentum, which would validate the strength of the bullish trend. With changing market sentiment and favorable technical indicators, Cardano seems positioned for a substantial move.

Cardano On-Chain Metrics Indicate a Breakout

Cardano has rallied over 15% since the announcement of last week’s interest rate cut, fueling speculation about a potential altseason in the cryptocurrency market this year. The wider market is becoming increasingly optimistic, and key data from Coinglass backs this sentiment, indicating a positive funding rate of 0.01%.

This funding rate suggests that traders are paying a premium to uphold long positions, reflecting their expectation of an impending price surge for ADA. Generally, a positive funding rate indicates a bullish market outlook, as it demonstrates traders’ willingness to bear extra costs to hold onto their positions, anticipating further price increases.

Cardano positive funding rate at 0.0105%. — Cardano’s positive funding rate at 0.0105%. | Source: Coinglass

As Cardano approaches the vital resistance level of $0.40, market sentiment suggests a potential breakout is on the horizon. If the price maintains its current pace and breaches this key resistance, analysts anticipate a vigorous surge towards new highs.

Investors are closely monitoring this crucial level, as a successful breakout could trigger a swift 25% rally towards the $0.50 mark. Such a scenario would signify a considerable recovery for ADA and bolster the growing conviction that altcoins, particularly Cardano, could thrive in the upcoming weeks.

Nevertheless, the market remains cautious. Although current sentiment and data hint at a bullish perspective, the price must maintain its upward momentum to confirm these forecasts. A failure to break through the $0.40 resistance may lead to a period of consolidation or even a short-term pullback.

As the cryptocurrency community eagerly anticipates ADA’s next moves, the upcoming days will be critical in determining whether Cardano can leverage this renewed optimism to spark a broader altcoin rally.

ADA Price Action: Key Levels To Monitor

ADA is trading at $0.39, positioning itself near a significant resistance level that has remained unbroken since late July. The price is currently less than 5% away from the daily 200 exponential moving average (EMA), which stands at $0.41.

This EMA has represented a crucial resistance point since mid-April and now coincides with an important supply area, creating a pivotal juncture for Cardano’s ongoing bullish momentum.

Cardano trading less than 5% below the 1D 200 EMA. — Cardano is trading less than 5% below the 1D 200 EMA. | Source ADAUSDT chart on TradingView

For the bullish trend to gain traction and move upward decisively, ADA must reclaim the 200 EMA and clearly surpass the $0.40 resistance. Achieving this would confirm a daily uptrend and may open the door for a sustained rally to higher price points.

However, if ADA fails to breach the current resistance and does not establish a new high, a deeper correction could ensue. A decline toward lower demand areas around $0.35 would likely follow as traders seek support before any potential recovery. The next few days will be crucial in determining if Cardano can break through this resistance and continue on a bullish path or if a pullback is on the horizon.

Featured image from Dall-E, chart from TradingView