Analyzing Cardano’s (ADA) Recovery Potential against BTC and ETH
Cardano (ADA) is showing signs of recovery after a recent decline, with favorable on-chain metrics suggesting increased bullish sentiment. Key support at $0.64 is crucial for continuing upward movement, but a close below $0.57 could invalidate the bullish outlook. Current data indicates a strong market sentiment leaning towards recovery, though caution remains necessary.
Cardano (ADA) is experiencing a slight recovery, trading around $0.70 after a nearly 7% decline the previous day. On-chain data indicates a favorable trend, as ADA’s funding rate has turned positive and bullish positions have reached a one-month peak, suggesting a market shift towards optimism. However, a daily close below $0.57 could jeopardize this bullish outlook.
The price of Cardano fell 36.36% last week, with a significant drop of almost 7% recorded on Monday. On Tuesday, the price has bounced back slightly after retesting the critical support level of $0.64, deemed a significant reversal zone due to historical trading patterns and the position of the Fibonacci retracement.
The $0.64 level is reinforced by multiple technical factors: the previously broken descending trendline, the 61.8% Fibonacci retracement level at $0.67, and the bullish order block stretching from $0.64 to $0.57, suggesting institutional support. Sustaining this support could allow ADA to extend its climb towards a resistance level of $0.98.
Despite the positive sentiment reflected in on-chain metrics, the Relative Strength Index (RSI) at 44 indicates emerging bearish momentum, as it sits below the neutral threshold of 50. A movement above this level would be vital for sustaining any recovery momentum.
On-chain data strongly backs Cardano’s potential recovery. ADA’s long-to-short ratio stands at 1.06, vouching for an optimistic market sentiment as traders exhibit a higher inclination towards long positions. The OI-Weighted Funding Rate for ADA reflects a positive sentiment of 0.0007%, indicating that long positions are outweighing shorts, which is typically optimistic for price recovery.
In conclusion, Cardano’s recent recovery signals are bolstered by positive on-chain metrics and technical supports. While the price appears to have stabilized around critical levels, vigilance is required given the potential for volatility. A failure to hold the $0.57 support could undermine upward momentum, thereby necessitating cautious optimism among investors.
Original Source: www.fxstreet.com
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