- ADA’s priced sitting above a critical support.
- Funding rates, open interests and active addresses surge.
Cardano [ADA] was priced above a crucial support level around $0.30 on the daily chart. A potential recovery could push its price above the $0.39 resistance level.
ADA has been trading within a descending channel since the end of the March bull run.
However, a recent double bottom at the $0.31 price level suggests that Cardano may have bottomed out and could be positioned for gains over 70% if the altcoin market rallies when the Federal Reserve cuts interest rates in mid-September.
Source: TradingView
Traders might consider setting entry points around the $0.30 range. If ADA breaks downward from the descending channel, further analysis will be needed to assess future price movements.
The $0.30 price zone has been tested three times, with the August 5th candle briefly breaking below the lower trendline.
Funding rates & open interest
In addition to the technical setup, Cardano saw a 9% price increase following the deployment of the Artificial Superintelligence Alliance (FET) token on its blockchain.
Open interest in ADA remains strong, showing an uptrend on the higher timeframes, which further supports the outlook for higher prices.
Additionally, green funding rates reinforce the potential for a Cardano price reversal, particularly as altcoins as a whole seem primed for a bullish move.
Source: TradingView
As AI-based cryptocurrencies gain more traction in the market, FET’s presence on the Cardano blockchain could positively influence ADA’s price over the long term.
Cardano’s active addresses
The deployment of FET has also boosted activity on Cardano’s blockchain, with ADA’s active addresses reaching a five-month high.
This heightened activity reflects growing interest and could bolster ADA’s price as more users engage with the platform.
Source: Santiment
Analyzing the volume of ADA’s active addresses reveals consistent engagement, with occasional spikes, such as the one observed during the market crash on August 5th.
This growing activity points to an increasingly bullish sentiment around ADA.
ADA vs BTC correlation
Cardano’s strong correlation with Bitcoin further supports the expectation of a price rally.
Bitcoin remains the primary driver of most major cryptocurrencies, including ADA, and a rise in BTC’s price is likely to trigger a similar surge in Cardano.
Currently, the correlation between ADA and Bitcoin stands at 0.74, up from 0.6, indicating a strengthening relationship.
Source: X
Realistic or not, here’s ADA’s market cap in BTC’s terms
If this trend continues, ADA could approach its historical correlation peak of 0.96, especially as development on its blockchain accelerates.
With these factors in play, ADA seems well-positioned for higher prices in the near future.
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