The price of Cardano has increased by 3% over the past 24 hours and is trading at a higher level as the broader cryptocurrency market recovers from its recent lows.
The total market capitalization of cryptocurrencies has increased by over 2% today, with major altcoins like ADA gaining momentum. As optimism gradually returns to the markets, ADA is expected to maintain its upward trend in the short term.
Cardano breaks the downward trend
Cardano (ADA) experienced a 3% recovery over the past day, pushing its price above the descending channel that kept its price in a downward trend between June 11 and 15. This pattern occurs when the asset's price forms lower highs and lower lows within two parallel descending trend lines, indicating a prevailing downward trend.
When the asset price breaks the upper limit of the channel, it indicates a potential trend reversal and the beginning of bullish momentum. The Balance of Power (BoP) readings for ADA confirm the return of bullish momentum. At the time of writing this report, this indicator shows a positive value of 0.33.
The Balance of Payments Index measures the strength of buyers against sellers in the market, helping to identify momentum shifts. When its value is positive, buyers dominate the market and push prices towards further gains.
ADA funding rate.
Moreover, this positive sentiment still persists among ADA futures traders, reflected in the positive funding rate of the coin. At the time of publication, this rate reached 0.0081%, according to Coinglass data.
The funding rate is a periodic payment between traders in perpetual futures markets to maintain consistency between contract prices and spot prices. A positive funding rate means long positions pay short positions, indicating bullish dominance and that most traders expect prices to rise.
Cardano faces a key test at $0.66
Although the path to $1 for ADA remains uncertain, strengthening bullish momentum may push the coin to break through the resistance level at $0.66 and target $0.73 in the medium term. If buying pressure continues at this level, the rally could extend towards $0.76.
However, the downward shift in sentiment among Cardano buyers may drive the price to $0.62, a level still within the bounds of the previous descending channel.
