Cardano (ADA) has recently caught the attention of cryptocurrency traders, with a significant breakout that signals the potential for a continued rally. After breaking out of a bullish flag pattern, ADA has been making notable gains, with some analysts forecasting a rise to $1.40, a key psychological resistance level.
With the asset trading at $1.12 at the time of writing, ADA has experienced a remarkable 7.11% increase over the past 24 hours. But what’s driving this surge, and what are the chances that Cardano will reach $1.40 in the near future? Let’s dive deeper into the technical indicators, market sentiment, and network growth that suggest ADA could be headed for further gains.
The most compelling reason for Cardano’s recent upward movement is its technical analysis. ADA has successfully broken out of a bullish flag pattern on the daily timeframe. This pattern is typically seen as a continuation signal, suggesting that ADA could see further upside in the coming weeks. The next key level of resistance to watch is $1.20, which could serve as a crucial hurdle before reaching the anticipated $1.40.
In addition to the bullish flag, ADA’s chart shows other technical formations that support a continued rally. Notably, the cup-and-handle pattern and inverted head-and-shoulders formation are both considered strong bullish signals. These patterns indicate that ADA is well-positioned to potentially surpass the $1.20 resistance and aim for $1.40.
Another factor contributing to the optimistic outlook for Cardano is the growing sentiment around its ecosystem. The potential integration of Ripple’s RLUSD stablecoin with Cardano has generated investor interest, especially as discussions around the importance of stablecoins in the crypto space continue to gain momentum. Charles Hoskinson, the founder of Cardano, has highlighted the significance of stablecoins, emphasizing that this partnership could further enhance Cardano’s decentralized finance (DeFi) capabilities.
The recent surge in XRP’s price action has likely fueled this optimism, indirectly supporting Cardano’s bullish momentum. If this partnership becomes a reality, it could bring increased development activity and user adoption to Cardano, making it an even more attractive asset in the long term.
On-chain data also paints a positive picture for Cardano. Daily active addresses have been steadily increasing, with over 46,000 active addresses recorded on January 16. This uptick in network activity signals growing confidence in Cardano’s ecosystem and its ability to deliver long-term value. The rise in active participation reflects not just a growing user base but also increased usage of the Cardano blockchain, which is crucial for sustaining price growth over time.
This growing network participation provides a solid foundation for ADA’s bullish momentum and could serve as a key driver of its price stability as the rally continues.
The overall market sentiment around ADA remains highly optimistic, with traders increasingly confident in the token’s upward potential. One clear indicator of this optimism is the rise in open interest, which has surged by 16.12%, reaching $1.48 billion. This signifies a high level of market participation and growing conviction that ADA will continue to rise.
Moreover, liquidation data reveals a strong imbalance between short and long liquidations. As of now, short liquidations have outpaced long liquidations by a substantial margin, with $559,640 in short positions being liquidated compared to $178,750 in long liquidations. This shows that bearish positions are being squeezed out of the market, reinforcing the belief that ADA’s bullish trend is likely to persist.
Key technical indicators further bolster the case for ADA’s continued growth. The Relative Strength Index (RSI) for ADA currently stands at 61.7, indicating strong upward momentum while still being well below overbought territory. This suggests that there’s still plenty of room for further price appreciation.
Additionally, the Moving Average Convergence Divergence (MACD) has shown a bullish crossover, signaling that buying pressure is on the rise. These indicators align with the breakout patterns on the chart, strengthening the case for a continued rally and a potential move towards $1.40.
With a strong bullish breakout, rising on-chain activity, and a highly positive market sentiment, Cardano (ADA) is well-positioned for a continued rally. If ADA can break through the $1.20 resistance level in the coming days, the next major target would be $1.40, a key psychological milestone.
The potential Ripple partnership adds further credibility to Cardano’s long-term prospects, potentially attracting more developers and users to its ecosystem. All these factors combined suggest that Cardano has a solid foundation for reaching $1.40, provided the current momentum holds.
Cardano’s breakout from a bullish flag pattern, coupled with strong technical indicators and rising network activity, indicates a promising future for ADA. If the token can clear the crucial $1.20 resistance level, a surge to $1.40 could be within reach. The market sentiment, increased trading activity, and the potential Ripple partnership further support this bullish outlook.
For investors watching ADA, the next few days will be crucial. If Cardano continues to build on its current momentum, it could hit $1.40 sooner than expected, offering significant gains for those who have positioned themselves in the market.
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