Cardano (ADA) is showing strong signs of a potential massive rally following its recent breakout from a descending trendline. This development could mark the beginning of a significant market reversal for ADA. In addition to the trendline breakout, ADA has also formed a bullish cup-and-handle price action pattern on the daily timeframe, indicating a possible breakout is imminent.
Cardano (ADA) Technical Analysis and Upcoming Levels
Expert technical analysis reveals that ADA is currently encountering strong resistance near the $0.365 level. If ADA manages to break through this resistance and close a daily candle above $0.366, it could potentially soar by 23%, reaching the $0.44 level in the coming days. This scenario is supported by data from Trading View.
Furthermore, ADA is currently trading below the 200 Exponential Moving Average (EMA) on the daily timeframe, indicating a downtrend. The 200 EMA is a widely used technical indicator by traders and investors to determine the overall trend of an asset. Despite being in a downtrend, the bullish price action patterns observed on the ADA daily chart suggest potential buying opportunities and a significant upside rally in the near future.
ADA’s Bullish On-chain Metrics
Cardano’s (ADA) on-chain metrics further support the optimistic outlook. According to Coinglass, the ADA Long/Short ratio stands at 1.025, reflecting bullish market sentiment among traders. Additionally, the future open interest for ADA has increased by 3.5% in the last 24 hours and has been on a steady rise since the beginning of September 2024. This growing interest from traders and investors indicates a buildup of long positions, signaling a potential breakout from both observed patterns.
As of the time of writing, ADA is trading near $0.357, with a price surge of over 2% in the last 24 hours. However, during the same period, its trading volume dropped by 40%, suggesting lower participation from traders. This decline in trading volume could be a temporary phase before a significant breakout occurs.
Conclusion
In conclusion, Cardano (ADA) is demonstrating strong technical and on-chain signals that suggest a potential massive rally in the near future. The combination of a descending trendline breakout, a bullish cup-and-handle pattern, and favorable on-chain metrics all point towards a bullish sentiment among traders and investors. As ADA continues to test critical resistance levels, a breakout could lead to substantial gains, making it a cryptocurrency to watch closely.
