- Cardano extends gains on Friday, following a close above a descending trendline the previous day.
- Technical indicators and on-chain data show bullish momentum, suggesting a rally ahead.
- A daily candlestick close below $0.361 would invalidate the bullish thesis.
Cardano (ADA) extends its gains on Friday, trading 5% higher at the time of writing after rallying 12% and closing above its descending trendline on Thursday. The technical outlook and on-chain metrics support ADA’s rise, which shows that bullish momentum is gaining traction and suggests a continuation of the rally.
Cardano bulls eye for April high
Cardano price broke and closed above a descending trendline (drawn by connecting multiple highs since the end of April) on Thursday. At the time of writing on Friday, it continues to edge higher around $0.431.
If ADA maintains its upward momentum and closes above its daily resistance at $0.445, it could extend the rally by 45% from its current level to retest its April 9 high of $0.624, which roughly coincides with the 61.8% Fibonacci retracement level (drawn from March high of $0.810 to an August low of $0.277) at $0.606.
The Moving Average Convergence Divergence (MACD) indicator further supports Cardano’s rise, signaling a bullish crossover on Thursday’s daily chart. The MACD line (blue line) moved above the signal line (yellow line), giving a buy signal. However, the Relative Strength Index (RSI) stands at 70, entering overbought conditions. Traders should be cautious of adding new long positions because the chances of a price pullback increase.
ADA/USDT daily chart
Cardano’s on-chain data further supports the bullish thesis. Coinglass’s data shows that the futures’ Open Interest (OI) in Cardano at exchanges is increasing. Increasing OI represents new or additional money entering the market and new buying, which suggests a bullish trend.
The graph below shows that ADA’s OI increased from $217.71 million on Wednesday to $329.01 million on Friday, the highest level since mid-April.
ADA Open Interest chart. Source: Coinglass
Santiment’s Age Consumed index aligns with the bullish outlook noted from the technical perspective. Spikes in this index suggest dormant tokens (tokens stored in wallets for a long time) are in motion and can be used to spot short-term local tops or bottoms.
For ADA, history shows that the spikes at the Age Consumed index were followed by a rally in Cardano’s price. The most recent uptick on Wednesday also forecasted that ADA was ready for an uptrend.
ADA Age Consumed index chart. Source: Santiment
Despite the bullish thesis signaled by both on-chain data and technical analysis, the outlook will shift to bearish if Cardano's daily candlestick closes below Thursday's low of $0.361. This scenario could lead to a 12.40% crash to retest its daily support at $0.316.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Bitcoin, crypto market remain in uptrend following 25 bps Fed rate cut
Fed Chair Jerome Powell stated that the FOMC lowered the Fed funds rate by 25 basis points. The rate cut comes after Bitcoin reached a new all-time high price upon Donald Trump's election victory. Ethereum and Solana also retained gains of 7% and 4%, respectively, following the rate cut.
XRP sees bullish momentum following $123 million increase in open interest
XRP exchange reserves in Binance and Upbit have declined by nearly $13 million. In the past three days, investors opened over $123 million worth of XRP positions. XRP needs to overcome key descending trendline resistance to stage a rally to $0.6640.
Coinbase launches wrapped Bitcoin token on Solana network
Crypto exchange Coinbase announced on Thursday that it has launched its synthetic Bitcoin token, cbBTC token, on the Solana network, marking its first token issuance on the Layer-1 platform. The new token will allow users to stake Bitcoin on Solana and use it as lending collateral.
Solana Price Forecast: Investors stake $1.3B SOL amid November winning streak
Buoyed by Donald Trump's victory at the polls, the global crypto market entered its third consecutive day on an uptrend on November 7, 2024. Amid the ongoing rally, Solana emerged one of the biggest gainers on Thursday, as demand for native memecoins further propelled market demand for SOL.
Bitcoin: New all-time high at $78,900 looks feasible
Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.