ADA appears to be bullish and poised for a massive rally, driven by a potential breakout and bullish on-chain data.
- ADA’s Long/Short Ratio stood at the 1.034 level, indicating bullish market sentiment among traders. ADA’s Futures Open Interest increased by 8.5% and continued to rise steadily.
In this ongoing market reversal, Cardano [ADA] appeared to be bullish and poised for a massive rally, driven by a potential breakout and bullish on-chain metrics.
Currently, the overall market sentiment has shifted, with major cryptocurrencies like Bitcoin [BTC] and Ethereum [ETH] experiencing significant upside momentum, and now Cardano is following suit.
Cardano price momentum
In the past three days, ADA surged more than 10%, trading near $0.36 at press time after a price surge of over 3.8% in the last 24 hours.
However, during this period, its trading volume dropped by 5%, indicating lower participation from traders and investors amid market reversal.
Despite an impressive price surge in recent days, ADA was still trading below the 200 Exponential Moving Average (EMA), indicating a downtrend on a higher frame.
The 200 EMA is a technical indicator used by traders and investors to determine whether an asset is in an uptrend or downtrend.
Despite this downtrend, ADA was near the neckline of a bullish cup-and-handle price action pattern at the $0.365 level at press time.
Historically, this level has been a point where ADA faced significant selling pressure and experienced price reversals.
Source: TradingView
If ADA breaches this neckline or resistance level and closes a daily candle above $0.367, there is a strong possibility it could rally by 20% to reach $0.445.
Bullish on-chain data
This bullish outlook is further supported by on-chain metrics. Coinglass’s ADA Long/Short Ratio was at the 1.034 level at press time, indicating bullish market sentiment among traders.
Additionally, ADA’s Futures Open Interest increased by 8.5% and continued to rise steadily.
Source: Coinglass
Traders and investors often use the combination of rising Open Interest and Long/Short Ratio above 1 while building their positions.
As of press time, 50.84% of top traders held long positions, while 49.16% held short positions. Thus, bulls were dominating the asset.
Source: Coinglass
Furthermore, ADA’s OI-Weighted Funding Rate was at +0.0096%, indicating bullish sentiment.
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