Cardano (ADA) is testing a critical resistance level amid strong bullish signals that could determine the short-term direction of its price.
Recent trading data shows that ADA remains above key moving averages, indicating strong bullish sentiment despite market volatility. “ADA’s derivatives Open Interest increased by 16.63% to $739.86 million,” according to data provided by COINOTAG, reflecting rising investor confidence and increased market participation.
Cardano’s price action suggests that it is at a tipping point as it approaches key resistance levels. Derivatives data also suggests increasing investor interest. Could a breakout occur at this point?
Can Cardano Maintain Its Bullish Advantage?
Cardano is performing strongly, trading consistently above the 20-day, 50-day, and 200-day EMAs. This suggests that the bulls are still holding the upper hand despite the ongoing consolidation, and the price action remains strong. This behavior suggests that buyers are still active, with ADA in particular seeing a strong 270% increase from early November to early December. A bull flag formation is also visible on the daily chart.
Currently, ADA is trading at a critical resistance level around $1.03. A close above this level could confirm a breakout of the bull flag and send prices to $1.21, which is in line with long-term trendline resistance. However, a pullback below $0.80 could invalidate the bullish scenarios and pull ADA back to the 200-day EMA at $0.62, which could signal weakness.
The daily Relative Strength Index (RSI) is currently at 52, indicating moderate bullish momentum. Staying above the midline could give the bulls an opportunity to reach the resistance levels in the next sessions.
ADA’s trading volume in the last 24 hours exceeded $1.7 billion, an increase of 12% in the last 24 hours, indicating a positive situation and opportunities for short-term investors. According to the latest reports, Cardano’s derivatives Open Interest increased by 16.63% to $739.86 million, indicating an increase in new positions. While the overall Long/Short ratio remained stable around 0.9755, a bullish trend is evident on some platforms; for example, on Binance, this ratio is reflected as 2.6127.
Since ADA’s performance is highly correlated with Bitcoin, it is important to monitor BTC’s price movements as major changes in BTC could directly impact Cardano’s short-term direction and investor sentiment.
