Cardano is encountering resistance at a critical supply zone, which is influencing its potential price trajectory. Despite ongoing market volatility, there are bullish signals that suggest short-term optimism.
Currently, Cardano (ADA) is trading at $0.3429, down 4% in the past 24 hours and hitting a weekly low of $0.3396. Over the last month, ADA has seen a 7% decline, with price movements being relatively unstable, including a 5% drop over the past week.
ADA has entered a significant supply zone between $0.3680 and $0.3823, which could determine its next price direction. If the token can break through this zone, it may aim for the $0.4158 level. However, failure to do so could lead to a drop toward $0.3566, a potential support level.
Key indicators such as Open Interest (OI) and Funding Rate point to sustained bullish momentum. OI has risen by 6.49% to $252.62 million, indicating increased market interest. Typically, a rise in OI is associated with positive price movements, suggesting that traders remain optimistic about ADA’s short-term prospects. Additionally, the funding rate, currently at 0.0132%, reflects favorable trader sentiment toward long positions.
On the other hand, the Relative Strength Index (RSI) offers a note of caution. With an RSI of 67.36, ADA is approaching the overbought zone (above 70), which could trigger a price correction if surpassed.
Cardano’s Price Outlook: Could a Rally Be on the Horizon?
Despite recent fluctuations, Cardano’s long-term price movement remains under pressure. Since its rally in the first quarter of 2024, the token has struggled to overcome resistance at the $1.04 mark, where over 1 million addresses hold approximately 2 billion ADA. Furthermore, the rising Mean Dollar Invested Age (MDIA) suggests that long-term holders may be exhibiting stagnant behavior, which could affect price momentum.
Although further dips are possible, broader market trends, such as a Bitcoin rally, might support a recovery for ADA. If Bitcoin surpasses $70,000, ADA could climb back to higher levels, potentially reaching $0.61 or more.
