NOIDA (CoinChapter.com) — Cardano (ADA) has surged over 40% in the past week, gaining momentum amid a broadly bullish cryptocurrency market. The rally coincides with a wave of optimism fueled by SEC Chair Gary Gensler’s announced resignation and expectations of a pro-crypto administration following recent U.S. elections.
These developments have sparked renewed confidence in the digital asset sector, drawing substantial investor interest and driving ADA’s breakout above key technical levels.
Ascending Channel Breakout and Its Implications
ADA’s breakout from an ascending channel could add more bullish cues to the token’s recent rally. The Cardano token had been moving inside the channel pattern for several weeks, with the recent influx of bullish sentiment helping ADA’s breakout.
ADA USD pair has broken out of a bullish pattern. Source: TradingviewBreaking above this structure indicates intensified buying pressure and hints at the potential continuation of the bullish trend.
ADA’s breakout from the channel puts the token on the path to reach the pattern’s projected price target near $2.36, a spike of over 110% from current prices.
Data from Coinglass provides further insight into this momentum. The funding rate for ADA has turned increasingly positive, highlighting demand for long positions as traders anticipate further upside.
ADA futures open interest. Source: CoinglassConcurrently, open interest in ADA futures has risen sharply, reflecting increased market activity and liquidity. Though the open interest is calming down now, the bullish market cues could still help ADA rally higher. Together, these metrics signal strong market confidence in ADA’s short-term potential.
However, caution remains warranted. The ascending channel breakout often leads to heightened volatility, and the elevated funding rate could expose the market to corrections if leveraged positions are unwound.
To sustain its upward trajectory, investors should monitor whether ADA can hold above the previous resistance, which has now turned support.
ADA Price Rally Halts
Meanwhile, the ADA USD pair‘s rocketing prices seem to have cooled down over the weekend, with the token failing to move above the 0.5 FIB retracement level.
ADA USD daily price chart with RSI.Moreover, the token’s relative strength index remains overbought, scoring 83.72. Overbought RSI levels often precede a bearish reversal for an asset, which could hike the selling pressure against ADA.
If the token fails to rally, ADA price could drop to the support near $0.95. Breaching the immediate support level could send the Cardano price tumbling to the support near $0.67 before recovering.
On the other hand, a continued uptrend would pitch the bulls against the resistance near $1.34 and $1.6.
The post ADA Price Rally Halts: Is a Bearish Reversal on the Horizon? appeared first on CoinChapter.
