Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer's opinion.
- The daily and four-hour timeframes showed a bullish bias.
- Demand drove the bounce from $0.38, but Bitcoin could ruin the bullish sentiment behind ADA.
Cardano [ADA] saw large price swings over the past twenty days. The move upward from $0.377 to $0.458 has been fully retraced in the past two weeks. Each of these moves is close to 20% on the price charts and is hefty on its own.
Read Cardano's [ADA] Price Prediction 2023-24
Bitcoin [BTC] was able to defend both the $27.8k and $28.8k support levels over the past few days, which suggested it could move higher once more. Combined with Cardano's higher timeframe bias, traders can anticipate gains for ADA.
The breakout past the higher timeframe range was encouraging
Source: ADA/USDT on TradingView
The blue line highlighted the lower high that Cardano formed on the charts after it fell beneath the $0.42 level. Over the past two days, ADA bulls could force prices above this lower high. This shifted the market structure from bearish to bullish.
The RSI also moved back above the neutral 50 mark to indicate bullish momentum. The OBV has pushed higher over the past four days, which showed strong buying pressure recently. Another strong indication of bullishness was the higher timeframe price action.
A look at the daily timeframe showed two things. First, the presence of a range that extended from $0.24 to $0.42. Second was the bearish order block formed in mid-February, which was flipped to a bullish breaker block after the breakout past $0.42.
Therefore, the lower timeframe retracement to $0.4 was likely to be followed by an ADA surge. To the north, notable resistance levels lie at $0.44 and $0.485.
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The strong rebound in OI highlighted bullishness
The Open Interest fell from $186 million to $162 million on 26 April, when ADA fell from $0.42 to $0.38. However, since then, both the price and the OI have recovered and pushed higher again. This showed speculators were bullish once more.
Liquidation data from Coinglass showed that although the sentiment was bullish, it was the long positions that suffered more pain in recent days. The aforementioned move down from $0.42 was accompanied by nearly $1 million worth of long positions liquidated within a span of 8 hours.
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