Cardano (ADA) shows signs of bounce back early according to on-chain data and derive.

As of Thursday, Cardano (ADA) is trading around the 0.43 USD mark, marking an increase of nearly 7% since the beginning of the week. This recovery momentum is being strongly pushed by large buy orders from whales and the overwhelming advantage of the bulls, accompanied by a positive funding rate. From a technical standpoint, the price action of ADA shows signals of continued recovery, with a target aimed at levels above 0.50 USD, promising a promising week for this coin.

On-chain data and derivatives of Cardano indicate a bullish trend

Data aggregated from CryptoQuant reinforces the bullish outlook for Cardano, as both the spot market and futures contracts record large buy orders from “whales,” along with a cooling of market conditions and a clear advantage for the buyers. These signals open up the possibility of a bounce back in the coming days.

In the derivatives market, the funding rate index of Cardano is also supporting a positive trend. According to OI-Weighted Funding rate from Coinglass, the number of traders betting on a decrease in ADA prices is currently significantly lower than those expecting a price increase.

The index turned positive on Wednesday and reached 0.0074% on Thursday, indicating that long positions ( are paying for short positions ). History shows that whenever the funding rate shifts from negative to positive, the price of Cardano often records strong upward movements.

Cardano funding rate chart | Source: Coinglass## Cardano price forecast: ADA finds support around a key support area

On Saturday, the price of Cardano (ADA) tested and found support near the lower trendline of the descending wedge pattern – formed by connecting the highs and lows with two trendlines – before bouncing back 9% in the following four days. At the time of writing on Thursday, ADA was fluctuating around the 0.43 USD level.

If the recovery momentum continues to be maintained, the price could extend its upward movement to the next resistance area at 0.49 USD. A successful close above this level will open up further upside potential, targeting the 50-day exponential moving average (EMA) around 0.56 USD.

Daily ADA/USDT Chart | Source: TradingViewTechnical indicators also support a positive outlook. The relative strength index (RSI) on the daily timeframe is currently at 34, after falling into the oversold zone last week, and is bouncing back, signaling that the downward pressure is showing signs of weakening as selling momentum dwindles. At the same time, the MACD has shown a bullish crossover signal on Thursday, issuing a buy signal and reinforcing the potential for ADA to maintain its recovery momentum.

On the contrary, if ADA fails to maintain support, the downward momentum could continue, heading towards the lower boundary of the wedge pattern, around the 0.39 USD mark.

SN_Nour