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Cardano’s price has gained 15% in the first 3 days of May 2024 but has since struggled to break above the $0.45 psychological resistance level. Crucial market data provide insights into the dominant social sentiment among ADA traders.
ADA Price Rally Stalls at $0.45, Performing Below Market Average
At the start of May 2024, the crypto market began a recovery phase that has seen the global market capitalization of altcoins surge by $142 billion over the past week.
The ADA price had initially raced to a 15% rally from $0.42 to $0.48 in the first three days of the month. But failure to reclaim the $0.50 milestone saw the fatigued Cardano bulls surrender most of the initial gains, as ADA prices retraced toward $0.45 at the time of writing on May 7.
At current prices ADA price is up 7.7% for the month. But this performance appears underwhelming when compared to the current TOTAL2 chart trends which captures the overall performance of all crypto assets excluding Bitcoin (BTC).
As seen above the 142 billion growth on the TOTAL2 chart represents a 15% boost in the overall altcoin markets for May 2024 so far.
Speculative Traders Bet Another $10M on ADA Price Breakout
With ADA grossly underperforming amid dominant positive sentiment surrounding the overall altcoin market, some strategic traders have been spotted placing bullish bets on ADA.
Coinglass’ Open Interest metric tracks changes in the value of capital invested in the perpetual futures contracts for a specific crypto asset. This provide insights into investors participation rate as well as the direction of their sentiment.
As seen above, ADA’s open interest stood at $205.7 million on May 1. However, that figure has now increased by, $10.5 million to hit $216.2 million mark at the time of writing on May 7.
This $11.5 million increase represents a 6% surge in open interest over the past week, coinciding with a 7% growth in Cardano price. When open interest increases persistently during a price uptrend, it suggests that the majority of Cardano holders are placing additional bets in hopes of booking amplified gains when spot prices surge in the days ahead.
ADA Price Forecast: $0.50 Retest in Play
Cardano price is trading at $0.45 at the time of writing, down 8% from the monthly peak of $0.48 recorded on May 3. However, drawing insights from the $10.5 million surge in open interest, ADA price looks set to make another attempt at reclaiming $0.50 in May 2024.
Looking at the Bollinger band indicator on Cardano’s daily price chart, bulls face stiff resistance at the 20-day SMA price level at $0.47.
Cardano ADA Price Forecast Flipping that critical resistance level at $0.47 could set the stage for the ADA price to break above $0.50 for the first time since April 23.
However, in the event of a bearish price reversal, the $0.43 buy wall could offer short-term support, as depicted by the lower-limit Bollinger band indicator.