- ADA continued its long-term downward trend as it dropped below the 200 day EMA. However, near-term volatility may offer buyers some opportunities.
- It is evident that the altcoin funding rates are indicating a decrease in pressure to sell.
There was a general decline in the mood for Cardano [ADA] over the past day as the Crypto Fear & Greed Index entered the ‘Extreme Fear’ zone.
It finally drew a bullish pattern after a string of red candles on its chart. Will it be enough to turn the narrative from bearish?
ADA is currently trading for $0.4, up around 2% from the previous day.
Cardano can reverse the current bearish trend.
Source: TradingView, ADA/USDT
ADA entered a long-term trend of bearishness, particularly after it dropped below the 200-day EMA level that is crucial for support.
The 200 EMA of ADA has become a significant resistance for the recovery of this coin.
ADA, for example, recently experienced a classic pennant bearish pattern on its daily chart after it rebounded from the resistance level.
The coin is likely to be volatile in the short-term as the coin attempts to overcome its 50-day EMA and 20-day EMA chains.
Since last week, sellers have repeatedly tested the $0.34 level as a strong support.
This latest recovery from the support is reflected in a widening, descending wedge. Over the past 4 days, this coin experienced a 15% increase and outperformed the overall market.
Close above current pattern is likely to confirm near-term bullish break out. This breakout will be confirmed by a closing above the EMAs of 20 and 50 days.
In the case above, ADA is likely to first test $0.48 as a resistance level before taking any action.
If the market continues to be negative, then the coin may test its next major support level of $0.304.
Relative Strength Index (RSI), which measures relative strength, closed at a level above 50 in order to demonstrate a easing of selling pressure. It happened after the RSI marked a bullish deviation with price.
Although the MACD line did show a bullish cross-over, it was still below the equilibrium. Bulls can make a powerful comeback if they close in on the equilibrium.
The Funding Rates are on the rise
Coinglass
Coinglass data indicates that ADA’s funding rates across all exchanges were consistently in an upward trend over the course of last week. The gradual rise in bullishness was evident.
Click Here to Read Cardano’s [ADA] Price Prediction 2024-25
Even the open interest for ADA has increased over the last day along with the daily increase in price. This suggests that many traders have entered new positions.
Take note of the 84% correlation between Bitcoin and ADA in the 60-day period. Before entering any new positions, you should consider BTC sentiment.
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Source: ambcrypto.com
