After experiencing a significant price decline of nearly 20%, the sentiment surrounding Cardano (ADA) is gradually shifting from a bearish trend to a more optimistic outlook, thanks to its recent bullish price action pattern. Historically, since July 2024, whenever ADA’s price descends to its current level, it tends to attract buying pressure, leading to an upward price rally. This recurring behavior suggests a potential opportunity for traders and investors looking to capitalize on ADA’s price movements.
ADA’s Perfect Buying Level
Examining ADA’s daily chart reveals that this is the fourth instance in the past four months where the price has descended to this critical support level, which can be considered a strategic buying point. At present, ADA is trading near the $0.333 mark, having experienced a 2.25% drop in the last 24 hours. Interestingly, during this period, the trading volume has surged by 26%, signifying increased trader and investor engagement. This heightened activity at the current price level underscores its significance as a potential entry point for buyers.
ADA Technical Analysis and Upcoming Levels
Delving into the technical analysis of ADA, experts highlight the cryptocurrency’s bullish stance as it hovers around a robust support level of $0.31. This price point has consistently provided a foundation for ADA since July 2024. Notably, whenever the asset approaches this level, it frequently experiences a price surge exceeding 20%. Based on the latest price movements, there’s a strong likelihood that ADA might witness a substantial price increase, potentially reaching the $0.40 mark in the forthcoming days.
Although the outlook remains positive, it’s important to note that ADA’s daily chart has formed a descending triangle pattern. Should ADA achieve a 20% increase this time, it would break through this pattern, potentially triggering a significant upside rally towards the $0.45 level. This possibility offers an enticing prospect for traders seeking to capitalize on ADA’s upward momentum.
Major Liquidation Levels
Currently, the major liquidation levels for ADA are set at $0.323 on the lower end and $0.337 on the upper end, with a notable degree of trader over-leverage observed at these points, according to on-chain analytics from Coinglass. If bullish sentiment prevails and the price ascends to $0.337, approximately $1.53 million worth of short positions could be liquidated. Conversely, if sentiment shifts negatively and the price drops to $0.323, about $1.99 million worth of long positions might face liquidation.
By synthesizing the liquidation data with technical analysis insights, it becomes evident that bulls currently maintain a dominant position in the market. This dominance suggests a promising upside rally and presents a compelling buying opportunity for those looking to invest in ADA. As traders and investors closely monitor these levels, the potential for significant price movements remains high, making ADA a cryptocurrency to watch in the coming days.
