Cardano’s native token, ADA, is showing signs of strong bullish momentum, with analysts predicting a potential 30% price surge. Despite recent struggles at the $1.25 resistance level, ADA’s technical indicators and on-chain data suggest a breakout could be on the horizon. Let’s explore what’s driving ADA’s price action and what investors should watch in the coming days.

ADA Price Struggles at Key Resistance

Over the past week, ADA has been consolidating near $1.25, a crucial resistance level. This price zone has proven difficult to breach as traders weigh market trends and investor sentiment. Cardano’s price movements have formed a classic “bull flag” pattern—a technical setup that often signals an impending rally.

If ADA manages to close a four-hour candle above $1.25, analysts suggest it could trigger a 30% rally, potentially pushing the price to $1.63.

Adding to the positive sentiment is ADA’s Relative Strength Index (RSI), a popular technical indicator. Currently sitting at 54, the RSI indicates that the token is not overbought, leaving room for further upward movement.

Massive ADA Outflow from Exchanges

In addition to technical indicators, on-chain data paints a bullish picture. According to analytics firm Coinglass, nearly $98.4 million worth of ADA has flowed out of exchanges.

This significant outflow suggests that large investors, commonly referred to as whales, are moving their ADA holdings to private wallets. Historically, such activity signals confidence in the asset’s future price potential.

When tokens leave exchanges in large volumes, it often reduces selling pressure, creating conditions for upward price movement. This aligns with the bullish narrative building around ADA.

Why the $1.25 Level Matters

Breaking through the $1.25 resistance is critical for ADA to realize its bullish potential. However, the current low trading volume could make this level difficult to surpass in the short term.

In the past 24 hours, ADA’s trading volume has dropped by 20%, despite the token posting a 1.5% price gain. This indicates that while investor sentiment remains positive, many traders are holding back, possibly waiting for a decisive breakout.

Should ADA successfully cross the $1.25 mark, it will likely face its next resistance near $1.50 before targeting $1.63.

What’s Driving Cardano’s Momentum?

Several factors are contributing to ADA’s current price dynamics:

1. Bullish Technical Patterns: The flag and pole formation points to a continuation of upward momentum.
2. Exchange Outflows: Large-scale transfers of ADA to private wallets highlight investor confidence.
3. Market Sentiment: Broader cryptocurrency market trends, particularly Bitcoin’s stability, are creating a favorable environment for altcoins like ADA.
4. Room for Growth: ADA’s RSI indicates it is not overbought, suggesting potential for further gains.

Potential Risks to Watch

While the outlook for ADA appears optimistic, investors should remain cautious. A failure to break above $1.25 could result in consolidation or even a short-term pullback. Additionally, declining trading volume could hinder upward momentum unless renewed interest emerges.

Broader market conditions, such as sudden Bitcoin price volatility or macroeconomic factors, could also impact ADA’s trajectory.

What’s Next for Cardano?

As ADA hovers near the $1.25 resistance, all eyes are on whether it can break out and sustain momentum. A successful rally could reinforce confidence in Cardano as a long-term investment, particularly as on-chain metrics signal increasing accumulation by large investors.

If ADA surpasses its resistance levels, it could open the door to a price surge, with analysts eyeing $1.63 as the next major milestone. For now, traders and investors will be watching closely for signs of a breakout.