Cardano (ADA) spent most of this year in a consolidation phase within a technical pattern known as a "flag," which kept its broader price structure compressed throughout this period.
A few weeks ago, specifically on August 22, bullish traders attempted to break out of this pattern, but the attempt failed, and the coin returned to its previous trading range.
But this time, buying activity was more intense. Since ADA's recent rebound from the 100-day exponential moving average near $0.19 five days ago, bullish traders have pushed hard, with the coin posting gains of more than 10% for most of the past 24 hours before pulling back again on the chart.
In any case, this latest move brings the "flag" pattern back into focus, as any breakout above its upper boundary would open the way to the next resistance at $0.29.
Funding rates point to growing buyer interest:
At the same time, signs emerged of rising demand in the derivatives market. According to Santiment, ADA recorded six consecutive days of positive funding rates, which means long position holders may be paying short position holders to keep their positions open. This positive rate could further support ADA's price movement if it is accompanied by stronger demand in the spot market, but very crowded long positions could increase liquidation risks if another breakout attempt fails.
Trading volume rises as ADA nears a breakout:
Cardano's trading activity also accelerated alongside the recent price move, as 24-hour trading volume surged to more than $747 million. The importance of this increase lies in the fact that any breakout backed by stronger volume will carry more weight than the failed attempt on August 22.
At the same time, ADA's fully diluted valuation (FDV) rose to around $9.95 billion, continuing a week of steady gains. A rise in this metric often points to a higher valuation alongside stronger trading activity.
Can ADA finally break out of the "flag" pattern?
At present, the main focus is on the resistance point of the "flag" pattern. If buyers manage to break through this resistance and continue trading above it, a $0.29 target could emerge. If they fail, ADA will remain confined within a consolidation range and may see another limited-range price move. It is also worth noting that there is a $24 million liquidity cluster at this resistance level.
Conclusion:
- Cardano buyers recently renewed their attempt to break out of the long-standing "flag" pattern.
- Four consecutive days of positive funding rates and trading volume exceeding $747 million could strengthen the case for a move toward the $0.29 target.
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