Cardano (ADA) Price: On-Chain Metrics Show Growing Bullish Sentiment

TLDR

• Cardano (ADA) price currently hovers around $0.74 after recovering over 4% this week
• Long-to-short ratio reached a monthly high of 1.15, indicating increased bullish sentiment
• Stablecoin market cap on Cardano hit an all-time high of $30.77 million, showing growing DeFi adoption
• Technical analysis suggests potential for 13% gains if ADA breaks above $0.77 resistance
• Exchange outflows of $13.75 million worth of ADA in 24 hours suggest accumulation by whales

Cardano (ADA) is showing signs of bullish momentum this week as on-chain metrics point to growing trader confidence in the eighth-largest cryptocurrency by market capitalization.

The digital asset is currently trading at around $0.74, having recovered more than 4% so far this week. This recovery comes after weeks of consolidation in a tight range between $0.69 and $0.75.

Data from Coinglass shows that the long-to-short ratio for Cardano has reached 1.15, its highest level in over a month. A ratio above one means more traders are betting on price increases rather than decreases.

Another positive signal comes from Cardano’s stablecoin sector. According to DefiLlama, the total market capitalization of stablecoins on the Cardano network reached an all-time high of $30.77 million earlier this week.

This rise in stablecoin activity indicates growing utility and adoption of Decentralized Finance (DeFi) applications on the Cardano blockchain. More users are turning to Cardano-based financial tools, which could boost demand for the native ADA token.

Technical Analysis

From a technical perspective, Cardano is approaching a key resistance level. The cryptocurrency faced rejection around its 50-day Exponential Moving Average (EMA) of $0.77 on Wednesday, resulting in a 2.16% decline.

Chart analysts point to $0.77 as a crucial level to watch. If ADA breaks above this resistance and maintains a daily close above it, the price could rally by 13% to test the next resistance at $0.83.

Cardano Price on CoinGecko

The Relative Strength Index (RSI) on the daily chart reads 49 and is moving upward toward the neutral level of 50. This suggests fading bearish momentum in recent trading sessions.

Further supporting the bullish case, the Moving Average Convergence Divergence (MACD) indicator on the daily chart showed a bullish crossover on Tuesday. This technical signal often indicates the start of an upward trend.

On-chain data from Coinglass reveals that exchanges have witnessed an outflow of $13.75 million worth of ADA tokens in the past 24 hours. Such outflows typically indicate that investors are moving tokens to private wallets for long-term holding rather than selling.

These exchange outflows can reduce selling pressure in the market and potentially trigger upward price movement as supply available for immediate trading decreases.

However, traders should exercise caution despite these positive signals. Data from Santiment shows a spike in the Age Consumed metric, indicating movement from previously dormant wallets.

This activation of dormant tokens could lead to increased selling pressure if long-term holders decide to take profits at current price levels.

Looking at lower timeframes, some analysts have identified an ascending triangle pattern forming on the 4-hour chart. This pattern, bounded by horizontal resistance at $0.775 and a rising trendline below, often precedes breakout movements.

A successful breakout above the triangle pattern could accelerate buying pressure and push Cardano’s price up by 15% to challenge resistance at $0.90, with a potential further rise toward the $1 mark.

The Bollinger Bands indicator on the 12-hour timeframe appears to be squeezing, which typically signals an impending increase in volatility. This could result in a strong price move in either direction once the consolidation phase ends.

Trading volume for ADA has dropped by 18% in the past 24 hours, suggesting some hesitation among market participants ahead of a potential breakout. Lower volume during consolidation is common before major price movements.

For now, Cardano remains in a decisive phase, with technical indicators and on-chain metrics suggesting building momentum for a potential upward move if key resistance levels can be overcome.