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ADA, the native token of the Cardano blockchain, is poised for significant upside momentum after breaking out of a bullish price action pattern on the daily time frame. Following a prolonged price decline in the cryptocurrency market, the overall market is recovering, sparking a major rally in ADA and confirming the breakout.
Cardano (ADA) Price Action and Upcoming Levels
According to expert technical analysis, ADA has formed a bullish Head-and-Shoulders price action pattern on the hourly time frame. With the recent price recovery, it has broken out of the pattern and closed an hourly candle above it.
This bullish pattern is often considered a buy signal by traders and investors, as it typically favors bullish momentum. Based on historical price trends, if ADA holds above the $0.95 mark, it could soar by 25%, reaching the $1.24 level in the coming days.
On the hourly time frame, this upside momentum has further broken above the 200 Exponential Moving Average (EMA), indicating that ADA has turned bullish in the short term.
On-Chain Metrics Bullish Sentiment
Observing this bullish price action, traders on Binance have built strong long positions, as reported by the on-chain analytics firm Coinglass.
79% of ADA Traders Are Long
Currently, the Binance ADAUSDT long/short ratio stands at 3.75, indicating strong bullish sentiment among traders. Further data reveals that 78.96% of top traders currently hold long positions, while 21.04% hold short positions.
However, traders seem to be continuously building new positions, resulting in open interest increasing by 9.89% in the past 24 hours.
ADA’s Trader Over-Leveraged Levels
As of now, traders are over-leveraged at $0.908, where bulls have built significant long positions worth $22.40 million. Meanwhile, short sellers appear to be over-leveraged at the $1.02 mark, with $3.87 million worth of short positions.
This liquidation data indicates that traders are strongly bullish, which might explain the substantial bets on long positions.
Current Price Momentum
Currently, ADA is trading near $0.999 and has experienced an upside momentum of over 7.5% in the past 24 hours. Despite the shift in market sentiment and the breakout, ADA’s trading volume has dropped by 44% during the same period, indicating lower participation from traders and investors.