Cardano quotes are at a key supply level that could trigger a significant rally towards novel highs. Following last week’s interest rate cut, optimism has increased among analysts and investors, with many expecting a forceful rise in the altcoin price.

This positive sentiment is reflected in the spot and futures markets, where key Coinglass data points to a bullish trend. A key market sentiment indicator for the funding rate suggests investors are bracing for a potential breakout.

If Cardano breaks through current resistance, a 20% rally is expected, potentially pushing the price to levels not seen in months. This breakout could strengthen the altcoin’s uptrend and set the stage for further gains.

As the price approaches this critical resistance, traders watch closely for signs of increased volume and momentum that would confirm the strength of the uptrend. As market sentiment changes and technical indicators level out, Cardano appears poised for a significant move.

Cardano on-chain indicators suggest a breakout

Cardano has surged more than 15% since announcing an interest rate cut last week, fueling speculation about a potential alternative cryptocurrency market season this year. The broader market is becoming confident and key data from Coinglass confirms this opinion by showing a positive financing rate of 0.01%.

This rate indicates that investors are paying a premium to hold long positions, reflecting their expectation of a potential raise in ADA prices. A positive funding rate generally suggests a bullish market outlook because it shows that investors are willing to incur additional costs to maintain their positions while expecting prices to continue to rise.

As Cardano approaches the key resistance level at $0.40, market sentiment points to a potential breakout. If the price maintains its current momentum and breaks above this key resistance, analysts expect an aggressive rally towards novel highs.

Investors are keeping a close eye on this level as a successful breakout could lead to a quick 25% gain towards the $0.50 level. This scenario would represent a significant recovery for ADA and reinforce the growing belief that Cardano-led altcoins could outperform in the coming weeks.

However, the market remains cautious. While current sentiment and data suggest a bullish outlook, the price needs to maintain its upward momentum to confirm this prediction. Failure to break the resistance at $0.40 could result in a period of consolidation or even a short-term retracement.

As the cryptocurrency community eagerly awaits ADA’s next move, the coming days will be crucial in determining whether Cardano will be able to capitalize on this renewed optimism and launch a broader altcoin rally.

ADA Price Action: Key Levels to Watch

ADA is currently trading at $0.39, hovering around a key resistance level that has not been broken since tardy July. The price is less than 5% off the $200 daily exponential moving average (EMA) at $0.41.

This EMA has been a significant resistance level since mid-April and currently coincides with a key supply zone, making it a key point for Cardano’s continued bullish momentum.

For the bulls to gain momentum and establish a stronger uptrend, ADA needs to reclaim the 200 EMA and decisively break the resistance at $0.40. Such action would confirm the daily uptrend and could pave the way for a sustained rally towards higher price levels.

However, a deeper correction may occur if ADA does not break through the current resistance and establish a novel high. A likely scenario would be a return to lower demand levels around $0.35 as investors look for support ahead of a potential rebound. The coming days will be crucial in determining whether Cardano can break this resistance and establish a more bullish trajectory, or if a pullback is imminent.

Featured image from Dall-E, chart from TradingView