Cardano [ADA] is slowly recovering from its recent decline, which saw its price hit a low of $0.33 earlier this month.
Over the past week, ADA has gained 1.8%, along with a further 1.3% increase over the past 24 hours, bringing its current trading price to $0.3584 at the time of writing.
The gains come as the broader crypto market struggles to regain momentum, and Cardano’s move has sparked renewed interest from investors.
ADA Preparing for a Surge to $0.40?
A key factor fueling the renewed optimism surrounding ADA is the technical pattern forming on its daily chart.
The asset recently rejected a key support area within an ascending triangle pattern, a signal that often suggests a potential bullish breakout.
If this trend sustains, ADA could continue to rise and potentially reach its next key resistance level at $0.40.
To clarify, the ascending triangle pattern is a popular formation in technical analysis, indicating a potential breakout to the upside.
This pattern is formed by a series of higher lows, creating rising resistance, while the upper boundary remains horizontal.
When an asset price repeatedly tests a resistance level but still forms higher lows, this suggests that buying pressure is increasing. Once the price breaks above the resistance level, an upward wave will follow.
In the case of ADA, an ascending triangle pattern formed as the asset faced consistent rejection in the price range of $0.27 – $0.33, creating a strong support level.
Following each rejection from this zone, ADA price has historically increased, suggesting that the asset could be ready for another upward move.
Given the recent rejection from support, there is speculation whether ADA could soon climb towards the $0.40 resistance, especially if broader market conditions improve.
Fundamentals support positive outlook
While the technical outlook suggests a continuation of the rally, Cardano's fundamentals have also bolstered the case for price growth.
Data from Santiment shows an increase in retail interest in ADA in recent weeks.
Source: Santiment
Although the number of active addresses has declined after peaking at 137,000 earlier this month, it has recovered by press time, reaching 29,000.
This resurgence in retail activity could provide additional momentum to ADA’s price, as it reflects growing interest in the asset among individual investors.
Furthermore, according to Coinglass, ADA Open Interest increased by 4.72%, valued at $231.29 million during the period. However, it has since decreased by 0.69% to $261.65 million.
Source: Coinglass
Despite the small decline, the increase in Open Interest has indicated that traders are positioning themselves for ADA’s further price movements, demonstrating confidence in its short-term potential.
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