Coin Circle Network reported:
Although ADA has been trading within a bullish symmetrical channel, the momentum of the breakthrough is increasing, but a large supply is imminent.
On-chain indicators suggest that if the momentum continues to strengthen, ADA may surpass this level.
Cardano [ADA]
In the past week and month, the Chinese stock market has experienced stagnation, rising by 3.65% and 3.69% respectively. However, a shift may be occurring as ADA has risen by 4.94% in the past 24 hours.
The key question now is: how long can this rebound last? ADA is approaching a critical supply zone that may determine its next direction.
Upward or downward? What do the technical charts indicate?
ADA has now entered the supply zone on the chart, which is a critical level where significant selling pressure may trigger a price drop.
The price range of this supply zone is between $0.3680 and $0.3823, and ADA must break through this range to reach the target of $0.4158.
If ADA fails to break through this level, the downward momentum may push the price to $0.3566, which could serve as potential support for a rebound.
Currently, AMBCrypto found that traders are still predominantly bullish, and ADA may attempt to break through the supply zone.
Fundamentally bullish momentum
Key indicators of ADA’s bullish momentum, such as open interest rates and funding rates, have increased significantly, suggesting that the price may rise.
At the time of writing, the open interest (OI) has increased by 6.49% to $252.62 million. This growth indicates sustained bullish momentum historically associated with price increases.
OI represents the number of outstanding derivative contracts on an asset, reflecting market sentiment. The percentage increase in ADA is a bullish signal.
In addition, according to ADA’s data, the funding rate, which measures regular payments between traders in perpetual futures trading, is currently 0.0132%.
This further strengthens the bullish prospects of the asset.
ADA is expected to face a market downturn
According to the relative strength index (RSI), ADA may face a downturn in the upcoming trading period.
The RSI is currently at 67.36, close to the overbought zone above 70. If ADA surpasses this threshold, the price may fall.
If this happens, we may see a decline in the current supply zone, pushing ADA towards lower support levels.
