Cardano (ADA) has been riding a wave of positive sentiment, which has reached a four-month high, boosted by a recognition of its smart contract use case by the U.S. Securities and Exchange Commission (SEC). This recognition is fueling optimism, with analysts predicting a potential surge in ADA’s price.

Cardano’s Bullish Momentum Reaches New Heights

As of March 20, 2025, Cardano’s price has experienced a steady rise, with ADA hitting $0.7324, marking a 3.04% increase. This positive momentum follows a significant development—the SEC has officially recognized Cardano’s smart contract functionality, particularly its application in government services. This milestone has led to an upswing in bullish sentiment, reaching the highest point in four months.

On-chain analytics firm Santiment highlighted this shift in sentiment, indicating that ADA’s social media engagement has spiked, which could signal that more traders and investors are becoming interested in the asset. The bullish sentiment is further fueled by the general growth in the crypto market, with ADA leading the charge among altcoins.

Key Technical Levels to Watch

Over the past few weeks, ADA has been consolidating within a narrow range between $0.69 and $0.75, creating a sense of stability. However, the asset is now approaching a critical breakout level. If Cardano successfully closes a daily candle above $0.76, analysts predict that the price could surge by up to 12%, with the next target potentially reaching $0.85.

This price level, $0.75, is particularly important as it aligns with the 200 Exponential Moving Average (EMA) on the daily chart, acting as a significant resistance point. A breakout above this level would be a clear bullish signal, likely attracting more buyers and pushing the price higher.

Over-Leveraged Positions: A Double-Edged Sword

Despite recent price fluctuations, the bullish sentiment is also reflected in ADA’s trading behavior. According to on-chain data from Coinglass, there is a significant amount of over-leveraged trading happening at the $0.715 level. Traders have opened $11 million worth of long positions, betting on further price appreciation.

At the same time, there are also $7.7 million in short positions around the $0.75 level, indicating that traders are divided. This large amount of over-leveraged positions suggests that if the price breaks through key resistance levels, the bulls could have enough momentum to drive the price higher, potentially fueling a rally.

Looking Ahead: A 12% Surge to $0.85 Possible

With bullish sentiment, increased social media activity, and a possible breakout above $0.76, Cardano is well-positioned for a potential rally. Traders are closely watching these technical levels, and the current market dynamics suggest that ADA could surge by 12%, reaching the $0.85 mark in the short term.

The combination of favorable on-chain metrics, positive sentiment from the SEC’s recognition of Cardano’s use case, and strong technical indicators makes ADA an asset to watch in the coming days.

Conclusion: ADA’s Potential for Growth

Cardano is experiencing significant momentum, and its price action suggests that a breakout above key resistance levels could trigger a strong rally. With bullish sentiment at a four-month high, ADA is poised for potential growth. Traders should keep a close eye on the $0.75–$0.76 range as it will determine whether the price can sustain its upward trajectory toward $0.85.

As always, investors should monitor market conditions closely, as crypto markets are highly volatile, and any sudden changes in sentiment could influence ADA’s future price action.