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Cardano is approaching a potential breakout rally amid market recovery and a rising number of long positions. Will this lead to an ADA price surge to $1?
As Bitcoin reclaims the $87,000 mark, the altcoins are gradually regaining momentum. Cardano, in the past 24 hours, has surged by 1.79% to sustain its dominance above the $0.70 psychological mark.
Currently, the ADA token is trading at a market price of $0.7239, marking its second consecutive bullish candle. With a fresh bullish start to the week, the recovery is aiming to surpass the 200-day EMA line. Will this recovery lead to a price surge to the $1 psychological mark?
Cardano Analysis Teases Breakout Rally
On the daily chart, the ADA price trend shows a short-term rounding-bottom reversal from the $0.70 psychological level. This completes a morning-star pattern on Sunday with a 1.31% recovery.
The bullish recovery continues with an intraday price surge of 1.58%, creating its second consecutive bullish candle. However, the recovery run faces resistance from the 200-day EMA line.
The dynamic average line acts as a crucial short-term resistance, keeping bullish growth in check. Moreover, due to the prevailing downturn and short-term consolidation, the 20-day and 200-day EMA lines are on the verge of giving a bearish crossover.
However, as the broader market recovers, a bullish recovery in Cardano that surpasses the average line will likely reduce the chances of any bearish crossovers.
Currently, consolidation is keeping the Cardano price between $0.70 and the 61.80% Fibonacci level at $0.7351. Due to the short-term consolidation, the daily RSI is approaching the halfway level, reflecting neutrality in trend momentum.
Increased Long Positions Amid Market Recovery
The current Cardano price trend shows a double-edged scenario at play. However, the broader market recovery signals a potential boost for the Cardano futures market.
Open interest has surged to $785.91 million, while the funding rate of the long-to-short ratio has reached a neutral point at 1.0396. This marks a significant rise in the number of bullish positions over the past three days.
Currently, the funding rate is at -0.0029%, reflecting a slight weakness in bullish sentiment.
Will Cardano Price Hit $1?
According to the Fibonacci levels, a bullish breakout of the 61.80% level will likely result in a price surge to the 78.60% level. This crucial resistance is just below the $1 psychological mark at $0.9216.
On the flip side, the 50% level at $0.6272 remains a key support for Cardano. A closing below this level will likely test the long-standing support trendline near $0.5708.