Cardano Set for 20% Surge? Analyzing ADA’s Move to $0.445

Contributor

Published: September 20, 2024

ADA’s Long/Short Ratio is currently at 1.034, reflecting a bullish sentiment in the market among traders.
ADA’s Futures Open Interest has seen an 8.5% increase and is on a steady upward trend.

As the market undergoes a reversal, Cardano [ADA] is displaying bullish signs and is set for a significant rally, encouraged by a potential breakout and positive on-chain metrics.

Presently, the overall market sentiment has shifted positively, with major cryptocurrencies like Bitcoin [BTC] and Ethereum [ETH] seeing considerable upward movement, and Cardano is now mirroring this trend.

Momentum in Cardano’s Price

Over the last three days, ADA has risen more than 10%, trading close to $0.36 at the time of writing, following a price increase of over 3.8% in the last 24 hours.

However, during this time, its trading volume fell by 5%, suggesting reduced activity from traders and investors amid the market shift.

Despite the significant price increase in recent days, ADA continues to trade below the 200 Exponential Moving Average (EMA), signaling a downtrend on a larger time frame.

The 200 EMA serves as a technical indicator that traders and investors use to gauge whether an asset is experiencing an uptrend or a downtrend.

In spite of this downtrend, ADA is hovering near the neckline of a bullish cup-and-handle price pattern at the $0.365 mark as of press time.

Historically, this level has been where ADA encountered considerable selling pressure and price reversals.

Source: TradingView

Should ADA surpass this neckline or resistance level and manage to close a daily candle above $0.367, there’s a strong likelihood of a 20% rally, targeting $0.445.

Positive On-Chain Data

This positive outlook is bolstered by on-chain metrics. At press time, Coinglass’s ADA Long/Short Ratio was at 1.034, suggesting bullish trader sentiment.

Furthermore, ADA’s Futures Open Interest has increased by 8.5% and continues on a steady rise.

Source: Coinglass

Traders often rely on a combination of increasing Open Interest and a Long/Short Ratio above 1 for their position-building strategies.

Explore Cardano’s [ADA] Price Forecast for 2024–2025

At the time of writing, 50.84% of leading traders were holding long positions, while 49.16% were in short positions, indicating that bulls are currently in control of the asset.