The last few days have been quite difficult for ADA. Recently ADA lost 3rd place in the market capitalization ranking to the BNB.

On the flip side, Bitcoin and ETH are up more than 12% in the last 7 days alone. Given the low correlation between ADA and the market’s large-cap altcoins, the recent “negative” reaction on the price chart is not surprising.

However, quite a few interesting things have happened so far that paved the way for a course reversal.

It is time for a change

Retailers’ interest in ADA is growing significantly. Open interest is at a monthly high ($ 747.33 million) at press time, underscoring the growing speculative interest.

At the same time, the number of leveraged long orders is also higher Night. Hence, it can be concluded that ADA traders are gradually becoming bullish on current prices.

ADA Futures Open Interest | The source: Night

The funding rate has also fluctuated in positive territory so far, which once again underlines the bullish sentiment among market participants. The financing rate curves of every major exchange such as Bitgate, OKEx, Huobi are pointing north at the time of going to press. However, this trend seems most solid on Huobi.

ADA Funding Rate History | The source: Night

A positive funding rate on the exchanges indicates that traders need to pay a spread in order to be long. If the positive level continues to rise in the next trading sessions, the price of ADA will likely increase by inches.

In fact, the number of long liquidations has also decreased, showing that the futures market is starting to support bullish traders.

Total liquidation | Source: ByBt

In the context of the “decoupling” of ADA from the market, the data mentioned are not really useful. It appears that the trader is now trying to reverse the downtrend in ADA.

The on-chain indicators also seem to be slowly returning to optimism. For example, NVT has had 3 spikes on the chart since 10/10. In addition, it can hold out there without falling back to the September lows.

Essentially, this means that Cardano’s network value far exceeds transaction volume – which is reasonable growth. This again signals bullish.

ADA-adjusted NVT | The source: Messari

But what impact will this have on the price of ADA? At the time of writing, it looks like the cops are finally getting into the fight. Based on Bitcoin’s bullish momentum and the bullish bias in the broader market, ADA is also moving north.

ADA price analysis

• Main Support Level: $ 1.92; $ 2.2
• Key Resistance: $ 2.38; $ 3

As noted in the most recent analysis, Cardano (ADA) has tried several times to break out via the descending parallel channel and it finally succeeded today. This brings the price to the upper end of the range between $ 1.92 and $ 2.38, levels that have acted as support and resistance for the past few days. A break above this range could trigger a quick rally to an all-time high of $ 3.

Daily ADA / USDT Chart | Source: TradingView

Technical indicators

Volume: The breakout across the descending parallel channel was accompanied by an increase in trading volume, suggesting that it is a valid breakout.

RSI: The RSI is in the overbought territory (> 70) over the four hour period, suggesting a retest of the breakout at $ 2.2 before approaching the resistance of the range at $ 2.38.

MACD: The Daily MACD has refused to make a bearish cross and is going up. This is an extremely bullish signal and suggests that a breakout above the range is possible.

Daily ADA / USDT Chart | Source: TradingView

Perspectives

The breakout above the descending parallel channel and the bullish signal on the technical indicators suggest that the short-term trend has turned up.

A break above the range between $ 1.92 and $ 2.38 will confirm that the bulls have complete control of the market. After that, ADA can rebound to the ATH level at $ 3.

On the other hand, any rejection of resistance could push ADA back towards $ 2. That seems like the less likely scenario, however, as the overall market has regained momentum after Bitcoin broke above its all-time high yesterday.

You can see the ADA prices here.

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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

SN_Nour

According to Cryptopotato

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