Key takeaways
- The value of ADA has risen by 6% in the past 24 hours, making it the best performer among the top 20 cryptocurrencies by market cap.
- The coin could rise towards the $0.2772 resistance level if the rally continues.
Cardano (ADA) is riding on recent gains, trading above $0.25 as of Monday after posting a modest rebound last week. A combination of stronger on-chain signals and improving derivatives data suggests that the uptrend may continue. Technical indicators are also pointing to increasing momentum, strengthening the near-term bullish case.
On-chain data and derivatives tend to be bullish for Cardano
Data from Santiment’s Social Dominance Scale support the constructivist view. This indicator tracks the proportion of ADA-related discussions across the broader cryptocurrency landscape. It rose to 0.206% on Monday, indicating increased market interest and improved sentiment among investors.
On the derivatives front, CoinGlass shows Cardano’s long to short ratio at 1.01. A reading above 1 indicates that more traders are taking bullish positions, reflecting the bullish bias in the market.
Meanwhile, Cardano funding rates turned positive on Thursday and continued to rise, reaching 0.0076 on Monday. Positive funding rates indicate that long positions are pushing short positions, which is a sign of strong demand. Historically, similar shifts from negative to positive financing, followed by rising interest rates, have coincided with upward price movements of ADA.
Cardano Price Forecast: ADA could extend its gains towards $0.2772
The 4-hour chart of ADA/USD is bearish and active as Cardano trades above $0.25 on Monday. The near-term bias is somewhat bullish as the price extends its recovery, approaching key resistance at the 50-day EMA at $0.27. A breakout indicates an upward movement.
Currently, momentum indicators have turned to the upside. The Relative Strength Index (RSI) on the 4-hour chart at 67 is trending upward, indicating impulsive buying pressure.
The Moving Average Convergence Divergence (MACD) indicator has moved back above its signal line just below the zero mark, indicating fading bearish pressure.
If the market undergoes a correction, ADA will likely retest the first major support at $0.24. A break of this support level will expose the swing low at $0.22 where buyers appeared previously.
However, if the rally continues, ADA could rise towards the $0.2772 resistance level, in conjunction with the 50-day moving average. A daily break above this level could send ADA rising towards the $0.2991 resistance level.
