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Cardano’s liquidation heatmap illustrated the sweeping up of liquidity while ADA continued its upward momentum.
As ADA’s price rose, the open interest also increased, indicating heightened trading activity and market engagement.
The sharp upward movement in price led to multiple liquidations, as shown by the dense color bands around the $0.40 to $0.45 range, signifying an increase in number of liquidations as price spiked.
The liquidations likely fueled ADA’s rapid price increase, as short positions got squeezed out, causing a rapid climb in price.
This kind of activity can create a cascade effect where the closing of short positions pushes the price even higher. If ADA maintains the momentum and holds above these crucial liquidity zones, it could continue to rise, possibly reaching higher resistance levels.
However, if the price falls back into these densely liquidated zones, it might encounter strong selling pressure, which could stall the current rally. Therefore, the liquidation levels are key in predicting ADA’s next moves.
Cardano’s 6 Consecutive Days Surge
According to CoinMarketCap, Cardano saw a significant uptick, with the price skyrocketing more than 38% in the last 24 hours as at press time, illustrating one of the sharpest climbs seen on this timeframe.
The surge occurred after ADA consolidated within a narrowing pattern, marked by decreasing volatility and lower highs, which traditionally suggests an impending breakout.
The MACD indicator confirmed the bullish momentum as it veered above the signal line, providing further credence to the upside movement.
The surge broke through several key resistance levels, notably at $0.34 and $0.40, with the price peaking near $0.81.
If ADA maintains its current trajectory above these critical thresholds, further gains could be on the horizon. The recent rally might attract more buyers, fueling the upward trend. However, traders should be cautious.
If ADA fails to sustain its hold above these support zones, particularly the $0.40 level, it could signal a lack of buyer commitment, potentially stalling the current rally and leading to a retracement.
Can ADA Reclaim 20 EMA on Monthly Time Frame?
Again, if ADA surges past the 20 EMA mark at $0.44 on the monthly time frame, the potential for a bullish trajectory towards the $7 range, marked by the 1.272 Fibonacci extension could heighten.
ADA’s strong upward thrust from a firm base near $0.018, followed by notable rallies and retracements aligning with Fibonacci levels, emphasized on the cyclical nature of ADA’s price movements.
ADA’s recent approach towards this critical 20 EMA level meant a potential reclaim followed by a successful retest of this moving average could serve as a strong bullish signal.
If ADA consistently maintains above this level, it could catalyze further rallies, especially with the market’s momentum indicated by the moving average convergence.
However, market dynamics and external factors could also play significant roles. Should ADA fail to hold this level, it might face retracements towards lower supports before making another attempt to rise.
Therefore, closely monitoring ADA’s interaction with the 20 EMA is essential for predicting its short-term price movements accurately.