Cardano (ADA), one of the leading Layer-1 blockchain platforms, has made headlines again as its native token surged nearly 10% over the past week. With the price now hovering near a crucial technical resistance level, market analysts believe ADA could be gearing up for a significant breakout.

The rally comes amid a wave of strong buying pressure and bullish on-chain indicators, which suggest that investor sentiment around ADA is turning increasingly positive. Here’s a breakdown of what’s driving the momentum—and what could be next for Cardano’s price.

ADA Nears Key Technical Breakout

Cardano’s latest price jump has brought it closer to its 20-day Exponential Moving Average (EMA), a widely-followed technical indicator that helps assess short-term market trends. As of Tuesday morning, ADA is trading just below this key level, signaling a potential breakout if bullish momentum continues.

The 20-day EMA gives more weight to recent price movements and often serves as a dynamic support or resistance level. If ADA manages to close and hold above this line, it would signal a shift in momentum from bearish to bullish, giving traders renewed confidence in an upward trend.

In simple terms, ADA appears ready to turn a corner—and the chart supports that view.

Bullish On-Chain Metrics Reinforce Price Action

Beyond the technical chart patterns, on-chain data is also flashing green for ADA. According to analytics firm Santiment, Cardano’s Network Realized Profit/Loss (NPL) has recently turned negative. This means that, on average, ADA holders are sitting on unrealized losses.

While this might sound like a bad sign at first, it often indicates reduced selling pressure. Traders and long-term holders are generally less likely to sell at a loss, which results in a tighter supply of tokens on the market. When supply is restricted and demand continues to grow, prices tend to rise.

This behavior is typical during accumulation phases, when savvy investors increase their holdings in anticipation of a future price increase. The data suggests that ADA is currently in such a phase.

Strong Buying Pressure Evident in Capital Flow

Another encouraging signal comes from the Chaikin Money Flow (CMF) indicator, which currently sits at +0.04 on the ADA/USD daily chart. CMF measures the volume of money flowing in and out of an asset, with positive values indicating capital inflows—and hence buying pressure.

A CMF reading above zero means that more money is entering the market than leaving it. In ADA’s case, this suggests that investors are actively accumulating the token rather than selling it off.

“Positive CMF, combined with ADA’s proximity to a key technical level, is a powerful combination,” said a market analyst. “It shows that there’s genuine interest and conviction behind this rally.”

What’s Next? Targets and Risks Ahead

With momentum building, traders and analysts are eyeing the $0.70 level as the next major resistance point for ADA. A sustained rally past the 20-day EMA could set the stage for a run toward this price target, especially if buying activity continues to outpace profit-taking.

However, it’s important to recognize the risks. After a strong week, some investors may be tempted to lock in gains, leading to short-term pullbacks. If that happens, ADA could retrace to around $0.55, a level where it previously found support.

But as long as broader market sentiment remains positive and ADA holds above critical support levels, the outlook for the coin remains bullish in the short to medium term.

A Closer Look at Market Sentiment

Despite recent volatility across the cryptocurrency market, Cardano’s fundamentals continue to attract attention. The platform has steadily expanded its smart contract capabilities and DeFi ecosystem, earning it a strong following among developers and investors alike.

The current rally appears to be a blend of renewed technical momentum and long-term confidence in Cardano’s ecosystem. The combination of reduced selling pressure, strong accumulation signals, and favorable technical indicators is creating a perfect storm for ADA’s price to climb higher.

Final Thoughts: A Breakout in the Making?

Cardano’s 10% weekly gain is more than just a blip—it’s a sign that buyers are stepping back in after a period of consolidation. With the coin approaching its 20-day EMA and strong capital inflows supporting the price action, ADA looks poised for a potential breakout.

Whether it can sustain the momentum will depend on broader market conditions and investor sentiment in the coming days. But for now, the bulls seem firmly in control—and the path to $0.70 is wide open.