Cardano (ADA) signals recovery as buying momentum begins to return

Cardano (ADA) records a nearly 4% increase on Monday, pushing the price close to the psychological level of $0.40. Signals from the derivatives market clearly reflect an improvement in investors’ risk appetite, as open interest (OI) on ADA futures contracts, along with the number of long positions, are simultaneously increasing. On the technical side, the trend picture continues to lean positive: market momentum is being reinforced, opening up room for ADA to challenge higher resistance levels in the near future.

Increased buying position thanks to stable DEX volume on Cardano

Data from Taptools shows a significant breakout in transaction volume within the Cardano ecosystem, rising from $3.19 million on Thursday to $4.06 million on Sunday. This development indicates a notable recovery in community interest, a trend that has remained stable since Cardano launched a privacy-focused sidechain called Midnight.

Cardano Transaction Volume | Source: TaptoolsIn the derivatives market, data from CoinGlass indicates that open contracts of Cardano futures have increased by 2.33% within 24 hours, reaching $729.41 million. This reflects a bullish sentiment among traders, with a higher risk appetite being demonstrated.

Cardano Derivatives Products | Source: CoinGlassNotably, the funding rate based on OI stands at 0.0054%, suggesting a bullish bias as traders are willing to pay fees to maintain long positions. Meanwhile, the long/short ratio increased to 54.73% on Monday, compared to 48.42% on the previous Sunday. If the accumulation of long positions continues to strengthen, Cardano is likely to enter a new bullish phase, driven strongly by leverage in the market.

Long/Short Ratio Chart of Cardano | Source: CoinGlass## Technical Outlook: Can Cardano Break the $0.40 Level?

Cardano recorded a nearly 4% gain on Monday, continuing its recovery after a clear bullish divergence appeared on the RSI indicator, formed between the two lows on 12/18 and 12/25. The upward momentum of ADA is currently heading toward the resistance trendline established by connecting the peaks on 10/28 and 12/09, around the $0.40 level on the daily logarithmic chart.

In a positive scenario, if ADA convincingly breaks above $0.40, the price is likely to move toward the 50-day exponential moving average (EMA) at $0.4379, serving as the next resistance target.

Daily ADA/USDT Chart | Source: TradingViewTechnical signals on the daily timeframe indicate that market momentum is gradually improving toward a neutral to positive outlook. The RSI indicator is currently at 46 and continues to rise toward the midline, reflecting weakening selling pressure. At the same time, MACD lines are approaching the zero line after forming a bullish cross at the end of last week, suggesting the upward trend is being reinforced.

Conversely, if ADA reverses and corrects, the S1 Pivot Point at $0.3283 could become an important support level, helping the price temporarily stabilize before facing selling pressure.