- Volume and speculative interest would be the key to gauging short-term strength.
- The 1-day chart showed Cardano has potential, especially with Bitcoin poised to rally.
Cardano [ADA] bulls have managed to climb past the $0.75 level and reclaim it as support. In doing so, the 1-day structure and the 4-hour structure flipped bullishly.
Bitcoin [BTC] has hovered around the $107k mark for a little over a day now, threatening a breakout beyond the $108.7k all-time high.
Source: CoinGlass
This impetus could electrify the market, including Cardano. At press time, the Long/Short Ratio was only 0.97. The taker buy volume was not overwhelming enough to indicate short-term conviction.
The long/shorts accounts data showed that the majority of accounts were positioned long, but their position sizes could be negligible.
$1 level is the next target
Source: ADA/USDT on TradingView
Cardano fell below the long-term range’s low at $0.69, but was able to reclaim this level as support in early May. The ADA bulls kept the recovery going thereafter.
The breach of the $0.756 level was a significant outcome. This level marked a swing high in mid-March, one set during the drop from $1.15 to $0.55.
A move beyond these highs, followed by a retest as support in recent days, was a positive sign for buyers.
The swing market structure aside, the sub-structure was also bullish. Therefore, Cardano was ready to rally higher. The OBV has been trending higher to show sizable demand for the token in recent weeks.
The RSI retested neutral 50 as support, and appeared to be climbing higher. If the ADA price can bounce higher, it would be a sign that a move toward the mid-range resistance at $0.9 was coming.
Source: ADA/USDT on TradingView
On the 4-hour chart, the swing structure was bullish too. The significant swing points were at $0.648 from early May, then a swing high at $0.84 a few days later.
Since ADA was able to recover from $0.72, the structure remained bullish.
The descending trendline resistance was also broken. In doing so, the recent lower high at $0.743 was broken.
The OBV was climbing higher, and the RSI bounced above neutral 50 to signal momentum had turned bullish.
Therefore, on multiple fronts, Cardano has a bullish outlook. Sustained demand was necessary to drive prices higher.
Traders can watch out for increased volume to trade the breakout, but also need to keep an eye on Bitcoin as well.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
