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Cardano is trading at an important supply level that could lead to a significant rally to new highs. Following last week’s rate cut, optimism rose among analysts and investors, with many anticipating strong upward momentum for the altcoin.
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This positive sentiment is being reflected in spot trading and the futures market, where key data from Coinglass reveals a bullish bias. The leading market sentiment indicator for Funding Rate indicates that traders are positioning themselves for a potential breakout.
If Cardano breaks the current resistance level, a 20% rally is expected, which could push the price to levels not seen in months. This breakout could reinforce the altcoin’s uptrend and pave the way for further gains.
As the price approaches this critical resistance, investors are closely watching for signs of increasing volume and momentum, which could confirm the strength of the uptrend. With market sentiment changing and technical indicators aligning, it appears that Cardano is ready for a significant move.
Cardano on-chain metrics indicate a breakout
Cardano’s price has risen more than 15% since the interest rate cut was announced last week, sparking speculation of a potential alternative in the cryptocurrency market this year. The broader market is turning optimistic, and… Key data from Coinglass Supporting this sentiment, it shows a positive funding rate of 0.01%.
This rate indicates that traders are paying a premium to maintain long positions, reflecting their expectations of a potential rise in ADA prices. A positive funding ratio generally indicates a bullish market outlook, as it shows that traders are willing to incur additional costs to hold their positions, anticipating further price increases.
With Cardano approaching the crucial resistance level at $0.40, market sentiment is pointing towards a potential breakout. If the price maintains its current momentum and breaks above this key resistance, analysts expect a strong rally to new highs.
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Investors are watching this level closely, as a successful breakout could lead to a quick 25% rally towards the $0.50 mark. This scenario would represent a major rebound for ADA and reinforce the growing belief that altcoins, led by Cardano, could outperform in the coming weeks.
However, the market remains cautious. While current sentiment and data point to a bullish outlook, the price must maintain its upward momentum to validate these expectations. Failure to break the $0.40 resistance level could lead to a period of consolidation or even a short-term bounce.
As the cryptocurrency community eagerly anticipates ADA’s next move, the coming days will be crucial in determining whether Cardano can capitalize on this renewed optimism and kick off a broader altcoin rally.
ADA Price Action: Key Levels to Watch
ADA is now trading at $0.39, hovering around a key resistance level that has not been broken since late July. The price is less than 5% away from the daily 200 Exponential Moving Average (EMA) at $0.41.
This moving average has served as an important resistance level since mid-April and is now in line with an important supply zone, making it a pivotal point for continuing Cardano’s bullish momentum.
For the bulls to gain momentum and establish a stronger uptrend, ADA must reclaim the 200 EMA and break through the $0.40 resistance level decisively. Doing so would signal confirmation of a daily uptrend and could pave the way for a sustained rally to higher price levels.
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However, a deeper correction may follow if ADA fails to break through the current resistance and make a new high. A pullback to lower demand levels around $0.35 would be the likely scenario as traders look for support before any potential recovery. The coming days will be crucial in determining whether Cardano is able to break through this resistance and create a further upward trajectory or whether a bounce is imminent.
Featured image by Dall-E, chart from TradingView