- ADA flashed strong bullish signals and seemed to be trading near a classic breakout pattern
- Derivatives data indicated rising trader interest, while critical support and resistance levels could quickly change ADA’s trajectory
Cardano [ADA] registered a massive 270% rally between early November and early December, before reversing from its long-term trendline resistance. Despite this pullback, however, the altcoin’s price action remained well above its 20/50/200-day EMAs — Underlining a strong bullish edge.
With the broader market sentiment still teetering, ADA’s near-term volatility could offer traders lucrative opportunities.
Can Cardano maintain its bullish edge?
Source: TradingView, ADA/USDT
ADA has maintained a strong bullish sentiment by staying above its 20-day, 50-day, and 200-day EMAs— Reaffirming a strong bullish edge despite the ongoing consolidation.
At the time of writing, the altcoin seemed to be trading near a classic bullish flag setup on its daily timeframe. A close above its $1.03 resistance could confirm this flag’s breakout. In this case, the bulls might eye the $1.21 zone, which sat near the long-term trendline resistance.
On the other hand, a break below its $0.80 support could invalidate the bullish tendencies. A drop below this level may pull ADA towards its 200-day EMA ($0.62) and stall the uptrend.
The daily Relative Strength Index hovered around the 52-mark at press time, alluding to mild bullish momentum. A sustained position above the midline can help buyers reclaim immediate resistance in the coming sessions.
ADA’s 24-hour trading volume soared above $1.7 billion, marking nearly 12% price gains over the past day. Such volume upticks are typically ideal for short-term trading setups.
Derivates data revealed THIS
Source: Coinglass
According to the latest data, ADA’s derivatives Open Interest rose by 16.63% to $739.86 million – A sign that new positions have been flooding the market.
While the overall 24-hour Long/Short ratio stood close to 0.9755, indicating a slightly neutral position, the exchange-specific ratios (e.g., Binance ADA/USDT at 2.6127) underlined a high bullish tilt among certain traders.
As always, it’s wise to track Bitcoin’s broader market mood, given ADA’s high correlation with BTC. Any sudden shift in Bitcoin’s price action could quickly influence Cardano’s near-term trajectory.
