Cardano (ADA) breaks out of the long-term pattern, what are the prospects for an upward trend?

Cardano (ADA) is maintaining a solid sideways trend around the $0.40 mark as of Monday, after the price convincingly closed above the descending channel pattern last week. The developments in the derivatives market reflect a clear improvement in sentiment, as the open interest (OI) of ADA increased, along with a rise in long positions within the trader community.

Positive Sentiment for Cardano in the Derivatives Market

Data from CoinGlass shows that the open interest (OI) of Cardano futures contracts on exchanges surged to $851.17 million on Monday, up from $644.34 million recorded the previous Tuesday, setting the highest level since mid-December. The strong increase in OI indicates that new capital is actively flowing into the market, reflecting growing demand and potentially serving as a key catalyst, fueling the current bullish trend of ADA.

Source: CoinGlass Alongside this, the long/short ratio of Cardano on CoinGlass has also continuously improved, reaching 1.06 on Monday, approaching the highest level of the month. The ratio surpassing 1 suggests that optimistic sentiment is prevailing, as more traders are betting on ADA’s price continuing to rise in the near future.

Source: CoinGlass

Cardano Price Forecast: ADA closes above the channel pattern

The price of Cardano has made an impressive breakout by closing above the upper trendline of the descending channel pattern—a technical structure formed since mid-October by connecting significant peaks and troughs. This upward momentum was maintained gently until Sunday, with ADA trading around the $0.40 level at the start of the week.

In a positive scenario, if Cardano maintains its current momentum, the price could extend its recovery toward the nearest resistance zone at $0.42, coinciding with the 50-day exponential moving average (EMA). A daily close above this level would act as a catalyst, paving the way for further gains toward the important resistance zone at $0.49.

Daily ADA/USDT Chart | Source: TradingView Technical indicators also support the bullish trend. The Relative Strength Index (RSI) on the daily timeframe is at 55, surpassing the neutral 50 level, indicating that buying pressure is gradually gaining dominance. Meanwhile, the MACD has issued a bullish crossover signal, with expanding green histogram bars above the neutral line, further strengthening the optimistic outlook.

However, if profit-taking pressure emerges, ADA still faces the risk of correction and could retreat to the nearest support zone around the recent low at $0.32.

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