The price of Cardano has risen 3% in the past 24 hours, trading higher as the broader cryptocurrency market recovers from recent lows.
The total cryptocurrency market capitalization has increased by more than 2% today, with major altcoins like ADA regaining momentum. With optimism gradually returning to the markets, ADA is likely to maintain its upward trend in the short term.
Cardano breaks free from the downtrend.
The 3% recovery of ADA over the past day has pushed its price above the descending channel that held prices in a downtrend from June 11 to June 15.
This pattern appears when the price of an asset forms lower highs and lower lows within two parallel downward-sloping trendlines, signaling a prevailing bearish trend. When the price of the asset breaks through the upper boundary of the channel, it indicates the potential for a trend reversal and the beginning of a bullish momentum.
The Balance of Power (BoP) index of ADA confirms the recovery in price momentum. At the time of writing, this index stands at a positive 0.33.
The Balance of Power (BoP) index measures the strength of buyers versus sellers in the market, helping to identify momentum shifts. When its value is positive, buyers are controlling the market and driving new price increases.
Moreover, this optimistic sentiment persists among ADA futures traders, reflected in the positive funding rate of the coin. At the time of writing, this rate is 0.0081%, according to data from Coinglass.
The funding rate is a periodic payment between traders in the perpetual futures market to keep the contract price aligned with the spot price. A positive funding rate means that long positions are paying short positions, indicating that bullish sentiment prevails and most ADA traders expect prices to rise.
Cardano faces a crucial challenge at $0.66.
Although ADA's path to $1 remains uncertain, strong bullish momentum could help the coin break through resistance at $0.66 and aim for $0.73 in the medium term.
If buying pressure continues to increase at that level, the upward momentum could extend to $0.76.
However, a shift in negative sentiment among Cardano investors could push the price back to $0.62, a level that still falls within the range of the previous descending channel.