Cardano (ADA) is showing signs of recovery after a sharp decline, with its price rebounding by 4% to around $0.70 on Tuesday. This follows a nearly 7% drop the previous day and a broader 36.36% decline last week. On-chain data suggests renewed optimism as ADA’s funding rate turns positive and bullish bets reach a one-month high.
Key Support Retest and Market Outlook
Cardano recently tested a crucial support level at $0.64, a zone that aligns with:
- A previously broken descending trendline.
- The 61.8% Fibonacci retracement level at $0.67.
- A bullish order block spanning $0.64 to $0.57, where institutional traders previously placed buy orders.
If this support level holds, ADA could extend its recovery toward the next resistance at $0.98. However, the Relative Strength Index (RSI) remains below neutral at 44, indicating lingering bearish momentum. A move above 50 would reinforce the bullish outlook.
On-Chain Metrics Reflect Strengthening Bullish Sentiment
- Long-to-Short Ratio: ADA’s 1.06 ratio is at its highest in over a month, signaling that more traders are betting on price increases.
- OI-Weighted Funding Rate: Currently at 0.0007%, this metric shows that long positions are paying short positions—typically a sign of bullish market sentiment.
Despite these positive signals, a daily close below $0.57 would invalidate the bullish thesis, potentially leading to a retest of $0.50 support.
Conclusion
Cardano is showing resilience after recent declines, with key support at $0.64 holding firm. While technical and on-chain indicators point to a possible rebound, traders should monitor whether ADA can regain momentum above $0.98 or risks slipping below $0.57.
