Cardano (ADA) is currently exhibiting stability around the $0.40 mark. An attempt to break out of a wedge pattern last week was unsuccessful. While short-term price action remains subdued, on-chain metrics and derivatives data suggest improving sentiment, indicating a potential increase in buying pressure.
This development supports the expectation that ADA is building momentum for a future upward surge.
Positive Sentiment Reflected in On-Chain Data
Data from CryptoQuant suggests a positive outlook for Cardano. Both spot and futures markets are reflecting large purchase orders from whales. These signals, combined with easing market conditions and prevailing demand, point towards improving trader sentiment and the potential for a price increase in the coming days.
- The long/short ratio for ADA on CoinGlass has reached 1.19, its highest level in over a month.
- This ratio, remaining above 1, reflects growing optimism as most traders anticipate a continued upward price trend.
Additionally, funding rate data reinforces the bullish outlook. The funding rate indicates that fewer positions are betting against Cardano compared to those anticipating a price increase.
This indicator turned positive on Saturday and reached 0.0020 on Monday, suggesting that bullish traders are willing to pay fees to maintain their positions. Historically, shifts from negative to positive funding rates have correlated with significant price increases for ADA.
Cardano Price Prediction: Preparing for a Wedge Breakout?
Cardano's price recently failed to surpass the upper trendline of a falling wedge pattern. This technical formation has been in place since mid-October. Following the rejection, ADA quickly declined by about 16%, continuing its decline until Sunday. It's now trading around $0.40.
In a bullish scenario, a successful breakout above the falling wedge pattern could reactivate an upward trend. The nearest target would be the resistance area at $0.51, corresponding to the 38.2% Fibonacci retracement level.
The Relative Strength Index (RSI) on the daily timeframe is currently around 40 and showing signs of moving towards the neutral level of 50. This indicates that selling pressure is gradually weakening. However, for a sustained upward trend, the RSI needs to clearly surpass this neutral threshold.
Conversely, if buying pressure is insufficient and ADA continues to correct, the price could extend its decline towards the low established on December 1st, around $0.37.
It is also worth noting that Cardano whales are actively accumulating, even as smaller investors are selling off. This could be another sign of a potential trend reversal.
FAQs
What are the on-chain indicators suggesting about Cardano's (ADA) price?
On-chain data, including large purchase orders from whales in both spot and futures markets, along with a positive long/short ratio and funding rate, indicate improving sentiment and potential for increased buying pressure, suggesting a possible price increase for ADA.
What are the potential price targets for Cardano (ADA) if it breaks out of the falling wedge pattern?
If ADA successfully breaks above the falling wedge, the nearest target would be the resistance area at $0.51, corresponding to the 38.2% Fibonacci retracement level. However, failure to break out could see the price decline towards $0.37.
Are Cardano whales buying or selling ADA right now?
The article indicates that Cardano whales are actively accumulating ADA, even as smaller investors are selling off, potentially signaling a future trend reversal and increased price.
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