Cardano's liquidation heatmap shows a sweep of liquidity, while ADA continues to maintain an upward momentum.
As the ADA price rises, open contracts also increase, indicating a rise in trading activity and market participation.
The sharp increase in price led to multiple liquidations, as shown by the dense color bands in the range of $0.40 to $0.45, indicating that the number of liquidations has increased as the price surged.
Liquidations may drive the ADA price up rapidly as short positions are squeezed, leading to a quick price surge.
This activity can create a cascading effect, where the closing of short positions drives up the price. If ADA maintains momentum and stays above these key liquidity areas, it may continue to rise and potentially reach higher resistance levels.
However, if the price falls back into these dense liquidation areas, it may encounter strong selling pressure, which could hinder the current bullish momentum. Thus, liquidation levels are key to predicting ADA's next move.
Cardano has surged for 6 consecutive days.
According to CoinMarketCap data, Cardano has seen a substantial rise, surging over 38% in the past 24 hours as of the time of writing, marking one of the most intense increases during this period.
ADA surged after consolidating in a narrow pattern characterized by declining volatility and lower highs, which traditionally indicates an upcoming breakout.
The MACD indicator turned above the signal line, confirming bullish momentum and providing further credibility to the upward trend.
The price surge broke through several key resistance levels, particularly at $0.34 and $0.40, with the price peaking around $0.81.
If ADA keeps its current trajectory above these key thresholds, further gains may be on the horizon. The recent rebound could attract more buyers, driving the upward trend. However, traders should remain cautious.
If ADA fails to maintain above these support areas, particularly the $0.40 level, it may indicate a lack of commitment from buyers, potentially hindering the current rebound and leading to a pullback.
Will ADA be able to reclaim the 20 EMA on a monthly timeframe?
Similarly, if ADA surges to the $0.44 level of the 20 EMA on a monthly timeframe, the likelihood of a bullish trajectory towards the $7 range (marked by the 1.272 Fibonacci extension) may increase.
ADA surged strongly from a solid base near $0.018, followed by a significant rebound and pullback consistent with Fibonacci levels, emphasizing the cyclical nature of ADA price movements.
ADA recently approached the critical 20 EMA level, suggesting that a successful retest of this moving average may result in a pullback, which could serve as a strong bullish signal.
If ADA continues to hold above this level, it may trigger further rebounds, especially in the context of market momentum indicated by converging moving averages.
However, market dynamics and external factors may also play a significant role. If ADA fails to hold this level, it may face a pullback to lower support levels before making another attempt to rise.
Therefore, closely monitoring the interaction between ADA and the 20 EMA is crucial for accurately predicting its short-term price movements.
