Cardano price holds $0.20 – But THIS level could decide ADA’s recovery

Cardano [$ADA] has rallied 2.42% in the past 24 hours, with an Open Interest increase of 2.5% in a day as of writing. The altcoin is up 17.7% over the past month.

The steady gains came alongside a Bitcoin [$BTC] rally above $80k. However, while $BTC has fallen back below $80k, the Cardano price continued to hold on to the $0.20 support zone.

Across different timeframes, $ADA showed both bullish and bearish signs. The past month’s momentum was impressive, but investors need to look out for some warnings.

Cardano price prediction: Recovery hinges on this zone

The Cardano price has climbed above the 20-week Moving Average at $0.198 and flipped it to support for now. Yet, it was still below the $0.26-$0.28 area that is a key overhead supply zone.

Specifically, the $0.2887 swing high from May needs to be breached to allow $ADA investors to believe in a long-term uptrend. The rally since June, though bullish, might still falter.

The CMF agrees with this idea, with a reading of -0.10 to signal capital outflows from $ADA markets on the weekly timeframe.

Should $ADA traders look to take profits?

The swing structure broke bullishly in June, when the latest lower high of the trend (back then, at $0.1849) was breached. The uptrend has kept going since then, with the Cardano price still on the bullish side of the 50-day moving average.

Yet, over the past two weeks, the altcoin has not managed to set a new high above $0.258.

At the same time, the $0.26-$0.28 supply zone from May was a key obstacle for the bulls to overcome. If they accomplish this, it would be a strong sign of recovery.

Until then, swing traders can maintain a bullish bias. A price move toward $0.26 can be used to take profits. Meanwhile, a drop below the $0.20 area would be a warning sign of a bearish shift.

If the $0.28 area is flipped to support, the next long-term buy opportunity could arise.

Final Summary

• Cardano has strong bullish momentum in recent weeks.
• This momentum has run into a pivotal supply zone, and capital inflows have slowed over the past week, according to the CMF.