ADA hits critical roadblock: Will its recovery stall?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Recent gains pushed ADA toward a critical price level.
- Indecision in the futures market could stall bullish recovery.
Cardano [ADA] continued its rebound from a year-low of $0.2200, with 9.6% gains over the past 24 hours. This took ADA to the key resistance level of $0.3035 before a pullback at the resistance level. However, ADA continued its ascent with price trading at $0.2952, as of press time.
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Altcoins have benefitted from Bitcoin’s [BTC] push to the $30k price zone with ADA maximizing the rally to rebound after hitting the December 2022 lows.
Bulls need to clear this roadblock to maximize gains
A recent price report highlighted $0.3 as a crucial level bulls needed to flip, due to its alignment with the 50% Fib level. Flipping this level will be key to ADA reversing its Q2 losses, as its last bullish rally from the level in March took it to a YTD-high of $0.4622.
Looking at ADA’s price movement on the 12-hour timeframe showed good bullish momentum in the short term. Four bullish candles in a row took Cardano to the $0.3035 resistance level, although price experienced a rejection at the level. Notwithstanding, the bullish momentum suggested that this level could be flipped from resistance to support.
Chart indicators also pointed to a continuation of the bullish rally. The Relative Strength Indicator (RSI) remained above neutral 50 with a reading of 56, as of press time. The Chaikin Money Flow (CMF) was also positive at +0.12, despite a slight dip.
With bulls making another advance for the resistance level, a session close above the level could signify buyers gaining the upper hand. On the flip side, a range formation between $0.2395 to $0.3035 could ensue if sellers continued to knock back the bullish advance at the $0.3 resistance level.
Are futures traders ready for a bullish run?
The four-hour timeframe data from Coinalyze revealed indecision between buyers and sellers in the futures market.
The Open Interest (OI), which tracks the number of open contracts in the futures market, remained largely unchanged. It ranged between $110 million and $115 million after a sharp drop from $188 million on 10 June.
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Without a significant uptick in the OI, ADA’s bullish recovery could be short-lived.
Also, the Funding Rate flashed negative and positive between 15 June to 22 June, although it was positive, as of the time of writing. This reinforced the possibility of a range formation if sellers continue to rebuff the bullish rally.