Cardano News Today: Cardano Rises on Growing Bullish Sentiment, Derivatives Build-Up

Cardano (ADA) surged nearly 4% on Monday, inching closer to the $0.40 level. The uptrend aligns with rising bullish sentiment, as derivatives data reflects a growing Open Interest and a higher proportion of long positions. Traders are showing increased risk appetite, with the long-to-short ratio climbing to 54.73% from 48.42% the previous day.

The recent uptick in ADA's price is supported by a notable recovery in decentralized exchange (DEX) trading volume within the Cardano ecosystem. Taptools data reveals a jump to $4.06 million in trading volume on Sunday, up from $3.19 million on Thursday. This indicates a return of user interest, bolstered by the launch of the privacy-focused Midnight sidechain.

CoinGlass data shows that ADA futures Open Interest rose by 2.33% in the last 24 hours, reaching $729.41 million. This suggests a buildup of positions as traders increase their exposure. The positive sentiment is also reflected in the OI-weighted funding rate of 0.0054%, showing traders are paying a premium for long positions.

Bullish Momentum and Derivatives Activity

The derivatives landscape is showing a bullish tilt, with the long-to-short ratio indicating a strong shift in sentiment. Traders are positioning themselves for potential leverage-driven rallies as the long positions strengthen. The surge in Open Interest and bullish bets suggests that traders are not only taking new positions but also reinforcing existing ones.

The OI-weighted funding rate remains a key indicator of bullish momentum. The current rate reflects a willingness among traders to hold long positions despite the risks, which is often seen as a positive sign for price action. As the long-to-short ratio continues to rise, it signals that the market is becoming more bearish on short positions.

Technical Outlook and Key Resistance Levels

From a technical perspective, ADA is approaching a critical resistance level near $0.40. The price has been rebounding from a bullish RSI divergence formed between the December 18 and 25 lows. If ADA successfully breaks above this resistance, it could aim for the 50-day Exponential Moving Average (EMA) at $0.4379.

The RSI is currently at 46, moving upward as selling pressure wanes. The MACD is also showing signs of bullish momentum, having crossed above the signal line on Saturday. These indicators suggest a gradual shift toward a more bullish outlook on ADA's price movement.

Risks and Potential Support Levels

Despite the bullish indicators, traders remain cautious about potential reversals. The S1 Pivot Point at $0.3283 serves as a key support level for ADA. A breakdown below this level could trigger a decline toward the $0.32 to $0.30 region. The technical structure still favors sellers during relief moves, and price remains below key Fibonacci retracement levels.

Derivatives and spot flow data indicate that traders are reducing their exposure rather than taking aggressive short positions. The recent decline in open interest suggests a de-risking trend rather than an aggressive bearish stance. Spot flows also remain negative, signaling limited accumulation and persistent supply pressure.

What This Means for Investors

For ADA investors, the current price action suggests a period of consolidation. The market is in a decision zone, with the next move likely to depend on whether buyers can defend the $0.34–$0.35 support band. A successful defense could lead to a relief move toward $0.38–$0.40, while a breakdown risks renewed downside toward $0.32 and $0.30.

Investors should also monitor the broader market conditions and key resistance levels. A sustained breakout above $0.40 would be a significant milestone for ADA, opening the path toward stronger resistance levels. Conversely, a failure to hold key support could lead to renewed bearish pressure.