Cardano (ADA) Shows Potential for Continued Rally as Positive Buying Pressure Builds

• Cardano (ADA) has recently surged nearly 10%, approaching a critical technical threshold that could set the stage for further price appreciation.

• This upward momentum is reinforced by a favorable Chaikin Money Flow (CMF), indicating that investors are increasingly accumulating ADA rather than liquidating their assets.

• According to data from Santiment, ADA’s Network Realized Profit/Loss (NPL) metric has turned negative, highlighting a trend that may discourage selling and push the price closer to $0.70.

Cardano (ADA) experiences a significant rally, with key technical indicators suggesting potential further gains amidst a positive market sentiment.

ADA Approaches Key Breakout Zone Amid Surge in Buying Pressure

ADA is trading near its crucial 20-day Exponential Moving Average (EMA), indicating a positive technical outlook. This moving average, which reflects the cryptocurrency’s average price over the past 20 days, emphasizes recent price movements, making it a vital indicator for traders.

When ADA successfully breaches its 20-day EMA, it can signify a shift in market sentiment from bearish to bullish. Such a crossover typically signifies heightened buying pressure and indicates that ADA has entered an upward trend.

A break above the 20-day EMA would not only signify increased momentum but also potentially establish this level as a new support area for ADA, providing buyers with additional strength in the market.

Further supporting this bullish narrative, on-chain metrics reveal that ADA’s Network Realized Profit/Loss (NPL) has moved into negative territory. This decline indicates that many ADA holders currently find themselves at a loss.

Such a scenario often deters selling pressure, as investors are reluctant to realize losses. This tendency to hold onto assets longer may restrict supply, contributing to upward price movements for ADA in the near term.

Cardano Bulls in Control

On the ADA/USD one-day chart, the positive Chaikin Money Flow (CMF) further strengthens the bullish case for ADA. Currently sitting at 0.04, this indicator evaluates capital inflows relative to outflows for the asset.

A positive CMF reading indicates that buying momentum is stronger than selling pressure, reflecting robust investor interest in ADA. This accumulation trend may facilitate a price increase toward the $0.70 mark, should the momentum continue.

Nevertheless, should profit-taking occur, ADA risks pulling back to the $0.55 support level. Investors will need to monitor volume and market sentiment closely to gauge potential price trajectory.

Conclusion

The recent advancements in Cardano’s price reflect a strengthening bullish sentiment driven by key technical indicators and on-chain metrics. A successful break above the 20-day EMA could pave the way for substantial gains, while negative NPL readings imply a reluctance among holders to sell at a loss. Investors should remain attentive to market developments that could influence ADA’s next moves.