- Cardano (ADA) has surged over 15% in the past week, with bullish technical indicators suggesting a potential upward rally.
- Increased active addresses and rising open interest further indicate growing retail interest and confidence among traders in ADA’s price movements.
Cardano (ADA) has seen an impressive surge of over 15% in the past week, igniting speculation about the sustainability of this bullish trend. After a challenging correction earlier this year, ADA’s price is finally showing signs of recovery. It peaked above $0.77 in January but faced a significant downtrend. However, as of now, ADA is trading at approximately $0.41, marking a 2.6% increase in the last 24 hours.
Technical Indicators Favoring an Upswing
A closer look at ADA’s weekly price chart reveals a significant bullish signal: the formation of a bullish engulfing candlestick pattern, which follows an inverted dragonfly doji. This pattern is widely regarded as a major reversal indicator, suggesting that the prolonged downward correction may be nearing its end and that a substantial upward movement could be on the horizon.
The emergence of this bullish pattern hints at the potential for sustained upward momentum, leading analysts to ponder whether ADA could be on the cusp of a longer-term rally.
Fundamentals Supporting the Trend
While technical indicators suggest a promising outlook for ADA, it’s crucial to assess the underlying fundamentals to validate this bullish momentum. One critical metric is the retail interest, represented by the number of active addresses. Data from Santiment reveals a recent uptick in ADA’s active addresses, which hit over 150,000 earlier in the month before dipping to around 120,000. However, the number has now recovered to exceed 130,000.
This resurgence in active addresses signals renewed retail interest and suggests a potential increase in trading activity and demand. Historically, a rise in active addresses often correlates with heightened buying pressure, which can lead to positive price action for ADA.
Open Interest: A Sign of Growing Confidence
Another key metric contributing to ADA’s bullish narrative is open interest in the futures market. The total number of open contracts has surged by 57.87%, reaching a value of $442.38 million at press time. An increase in open interest, alongside rising prices, is typically viewed as a sign of confidence among traders. This trend indicates that new money is entering the market, aligning with the notion of continued price growth.
As more capital flows into ADA futures contracts, it could amplify price movements and sustain the current rally.
A Potential Turning Point for ADA
The recent surge in Cardano’s price, bolstered by promising technical indicators and strengthening fundamentals, suggests that ADA may indeed be at a turning point. While caution is warranted given the cryptocurrency’s volatility, the signs indicate that ADA could be gearing up for a more significant rally. Investors and traders alike will be watching closely to see if this momentum can be sustained in the days and weeks to come.
