Cardano (ADA) Shows 10% Rebound Potential After Recent Decline

Cardano (ADA) has shown signs of a potential upward trend following a week of decline. From June 10 to June 17, ADA's value dropped nearly 10% from its local high of $0.73 to a low of around $0.60. This decline appears to have set the stage for a possible reversal, as indicated by recent technical developments.

An analysis by MyCryptoParadise on TradingView identified several early indicators of a trend reversal on the 4-hour chart. At the time of the analysis, ADA was trading close to $0.6245, attempting to maintain support in a crucial area. The analyst noted an internal change of character (I-CHoCH) following a liquidity sweep below $0.62, suggesting that bearish momentum is diminishing and that the market may be shifting towards a more positive setup. Other analysts have also predicted a significant upswing for ADA, with a bullish divergence on the MACD further supporting this view. Despite ADA registering a lower low, the histogram and signal line within the MACD showed higher lows, a decoupling that often precedes a change in trend direction.

Further bolstering the bullish case, a previous resistance zone between $0.63 and $0.64 has transformed into a support level. The chart indicates a reaction near the $0.6421 level, where ADA rebounded after dropping to $0.61 on June 14. The current trading level shows signs of stability, but the next steps are crucial. Recent predictions suggest a bullish turn before June 30, and maintaining a position above $0.63 would strengthen the short-term bullish outlook. A break above minor resistance near $0.67 could pave the way for further gains, potentially targeting the $0.70 region. This move would represent over a 10% increase from current levels, assuming the upward momentum is sustained. However, closing below $0.62 could invalidate the current outlook.

ADA’s derivatives data also points to cautious optimism. Long liquidations totaled $1.6 million compared to $236,000 for shorts, and funding rates remained positive. The overall long/short ratio was 0.9391, but Binance and OKX showed a stronger long bias, both above 2.4. However, options activity plunged 92.94%, indicating reduced institutional positioning and lower volatility expectations. Despite this, the lack of a clear downtrend keeps short-term sentiment slightly bullish, with some projections suggesting a rise to $1.

Ask Aime: Is Cardano (ADA) on the verge of another bull run?