ADA breaks the descending wedge pattern, testing a key resistance area at $1.10.
Market sentiment aligns with the increase in network activity, enhancing ADA's potential for sustainable growth.
Cardano [ADA] is regaining upward momentum as both crowd sentiment and smart money indicators signal a positive outlook for this token. With the continuous increase in network activity, Cardano is regaining the attention of investors.
At the time of writing, ADA is trading at $1.08, reflecting a slight decline of 0.51% over the past 24 hours.
However, with both technical and fundamental indicators being positive, the question arises whether this sentiment will translate into a breakout above key resistance levels.
Is a breakout through the supply zone possible?
The daily chart of ADA shows a promising picture as the token breaks out of a descending wedge pattern.
This bullish pattern often predicts upward price movements, and ADA is currently testing a significant supply zone between $1.08 and $1.10. However, this zone may become resistance in the short term.
Moreover, the continuous formation of higher lows supports a stronger bullish trend. If ADA surpasses $1.10, it could target $1.30, but if it cannot maintain this level, it could lead to consolidation around $1.00.
Therefore, traders should closely monitor price action in the coming days.
Source: TradingView
The significance of increased network activity
Cardano's network activity reflects renewed interest from both investors and users. Over the past week, new addresses increased by 4.79% and active addresses rose significantly by 11.99%.
Furthermore, non-zero balance addresses increased by 12.26%, indicating growing participation with the network.
These increases suggest a broader acceptance trend consistent with improved sentiment around Cardano.
Additionally, the increased participation across the network creates a solid foundation for price growth, making ADA's bullish momentum more sustainable in the long term.
Source: IntoTheBlock
Understanding market positioning
The Long/Short ratio reveals a slightly cautious market, with 53.45% of positions being short and 46.55% long. This imbalance suggests that some traders are taking profits or hedging against potential downside risks.
However, such positioning could lead to short squeezes, where increased buying pressure forces short positions to close. Therefore, a surge in demand could further enhance ADA's bullish breakout potential.
Source: Coinglass
Cardano: Assessing the growth of transaction value
Cardano's NVT (Network Value to Transaction) ratio highlights steady growth in transaction volume relative to its market capitalization. This increase indicates that ADA's valuation is supported by strong network utility.
Furthermore, increasing trading activity indicates that the Cardano ecosystem continues to expand, reinforcing its bullish narrative. Thus, the rising NVT ratio is a positive indicator for long-term sustainability.
Source: Santiment
Conclusion: ADA is well-positioned for a breakout
The combination of the bullish technical pattern, increased network activity, and improved sentiment around Cardano indicates strong growth potential.
Therefore, if ADA can surpass the resistance level of $1.10, it is likely to maintain its bullish trajectory. Can this token leverage this momentum? All indicators suggest that this is very likely.
