- ADA sent a strong bullish signal and appeared to be trading near a classic breakout pattern.
- Derivatives data has indicated growing interest from traders, and significant support and resistance levels could quickly change ADA’s trajectory.
Cardano (ADA) posted a massive 270% rally between early November and early December before reversing from long-term trendline resistance. However, despite this decline, the altcoin’s price action remained well above the 20/50/200-day EMA, supporting strong bullish momentum.
With broader market sentiment still volatile, ADA’s near-term volatility could present a profitable opportunity for traders.
Can Cardano Stay Strong?
Source: TradingView, ADA/USDT
ADA has maintained a strong bullish sentiment by rising above the 20-day, 50-day, and 200-day EMA. This reaffirms the strong bullish lead despite continued consolidation.
At the time of this writing, the altcoin appeared to be trading near a typical bullish flag setting on the daily time frame. A breakout of this flag could be confirmed if the price closes above the $1.03 resistance line. In this case, bulls could keep an eye on the $1.21 area, which is near the long-term trendline resistance.
On the other hand, a drop below the $0.80 support level could invalidate the bullish trend. A drop below this level could pull ADA towards the 200-day EMA ($0.62), stalling the uptrend.
The daily Relative Strength Index was hovering around the 52 level at press time, suggesting some bullish momentum. A sustained position above the center line may help buyers regain immediate resistance in the next session.
ADA’s 24-hour trading volume surged to over $1.7 billion, registering a price increase of nearly 12% over the past day. This increase in volume is generally ideal for short-term trading setups.
Derivatives data disclosure THIS
Source: Coinglass
According to the latest data, ADA’s derivatives open interest increased 16.63% to $739.86 million. This is a sign that new positions are flooding the market.
While the overall 24-hour long/short ratio was close to 0.9755, indicating a slightly neutral position, exchange-specific ratios (e.g. Binance ADA/USDT at 2.6127) highlighted a highly bullish trend among certain traders.
As always, given the high correlation between ADA and BTC, it is wise to track Bitcoin’s broader market sentiment. A sudden change in Bitcoin price movement could quickly impact Cardano’s near-term trajectory.