Key Points
•Cardano (ADA) breaks through a key technical level, reaching its highest price in three months.
•Technical indicators and on-chain data suggest the uptrend is likely to continue, with a clear price target.
Cardano breaks resistance, targeting April highs
Cardano (ADA) has recently performed well, with the price surging over 16% to break above the downtrend line that had constrained its upside for several months. This rally has pushed the ADA price above $0.44, reaching its highest level since July. Currently, the ADA price is close to $0.43, with a market capitalization of over $15 billion, re-entering the top 10 cryptocurrencies and surpassing TRON (TRX).
If this upward momentum continues, analysts expect ADA could retest its April 9th high of $0.624, especially after breaking the next resistance level of $0.445. This target is close to the 61.8% Fibonacci retracement, further strengthening the bullish market expectations.
Technical indicators show strong ADA uptrend
The technical picture supports the ADA rally. On Thursday, the Moving Average Convergence Divergence (MACD) indicator on the daily chart formed a bullish crossover, with the MACD line (blue) crossing above the signal line (yellow), generating a buy signal. However, with the Relative Strength Index (RSI) reaching 70, ADA has entered overbought territory, which may mean a brief pullback could occur as investors assess the risks.
ADA has strong support at $0.361; if the price falls below this level, the bullish outlook may weaken. However, if ADA maintains above this level, the price is expected to continue rising.
On-chain data supports bullish expectations
In addition to the technical indicators, ADA's on-chain data also shows increasing buying interest. According to Coinglass data, the futures open interest (OI) of ADA on major exchanges has increased from $217.71 million on Wednesday to $329.01 million on Friday. The growth in OI indicates new capital entering the market, further confirming the bullish trend.
Santiment's "dormant circulation" index has also risen recently, tracking the movement of ADA tokens that have been dormant for an extended period. Historical data shows that a spike in this indicator usually precedes an ADA price increase, and the latest bullish signal appeared on Wednesday, suggesting the asset may be poised for further upside.
The role of overall market sentiment
ADA's rise is consistent with the broader positive market sentiment, partly due to the Federal Reserve's recent 0.25% interest rate cut. Lower borrowing costs may encourage investors to shift towards higher-risk assets like cryptocurrencies. Additionally, BTC recently hit a new high above $76,800, further fueling the market's optimistic mood.
The potential impact of FOMO
Santiment notes that ADA's upward momentum may trigger FOMO (fear of missing out) among retail investors. Once FOMO sentiment is triggered, it can attract more buyers, increasing demand and driving the price higher. However, traders should be cautious, as FOMO-driven rallies are often accompanied by increased volatility and may be followed by short-term pullbacks as investors take profits.
Conclusion
ADA's recent price action shows a strong bullish outlook, supported by both technical indicators and on-chain data. While risks remain - particularly if ADA fails to hold the current support level - the asset's momentum suggests further upside potential after breaking key resistance levels.
The above content is based on public market information and is for reference only, not constituting any investment advice. The cryptocurrency market carries high risks, and investments should be made with caution.
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