Cardano (ADA) has begun the New Year with positive momentum, extending its recent gains to trade above $0.36 as of Friday’s writing. Strengthening on-chain metrics and derivatives data indicate increasing bullish interest, while the technical perspective continues to highlight potential for an upside breakout.
On-chain and derivatives data indicate a bullish bias CryptoQuant’s summary data supports a positive outlook, revealing significant whale orders within Cardano’s spot and futures markets, alongside cooling conditions and clear buy-side dominance. Collectively, these factors signal improving trader sentiment and suggest a potential bullish breakout in the near term.
Furthermore, Cardano’s funding rate data indicates a potential rally is on the horizon. According to Coinglass’s OI-Weighted Funding Rate, traders anticipating a price increase now outnumber those betting on a decline. The metric flipped positive on Thursday and reached 0.0068% on Friday, which indicates that long positions are currently paying short positions. Historically, as illustrated in the chart below, such a shift from negative to positive funding rates has often preceded sharp rallies in Cardano’s price.
Cardano faced rejection at the upper trendline of its falling wedge pattern—which has defined price action since mid-October—on Monday, leading to a nearly 10% decline by Wednesday. However, ADA staged a strong 6.9% recovery on Thursday and is retesting that same upper trendline boundary as of Friday.
Should ADA successfully break out of this falling wedge formation, the rally could extend toward the next immediate resistance level at $0.42, which coincides with the 50-day Exponential Moving Average (EMA).
On the daily chart, technical indicators show improving sentiment. The Relative Strength Index (RSI) reads 43 and is pointing upward toward the neutral 50 mark, suggesting that bearish momentum is fading; a cross above 50 is needed to sustain bullish momentum. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator maintains a previously formed bullish crossover, supporting a slightly positive outlook.
Conversely, should ADA face a correction, the downturn could extend toward Wednesday’s low at $0.32
