Cardano is hot as fire: Bullish signals from all 3 fronts

Cardano (ADA) holds steady near the $0.8 mark on Friday, after an impressive 5% bounce back in the past 24 hours. This recovery is driven by a surge of interest from traders, as reflected in a 12% increase in the total open contracts (OI) in just one day.

The on-chain picture also reinforces positive expectations for ADA: the number of active addresses continues to increase, while the profit/loss ratio (volume in profit/loss ratio) is clearly leaning towards profit. These signals indicate that cash flow is returning and investor confidence is bouncing back strongly around the current price range.

Cardano network activity surges, reflecting increasing demand

According to data from Santiment, the number of Unique Active Addresses (UAA) in the last 24 hours for Cardano has risen to 30,900 on Friday, compared to 29,600 addresses recorded a day earlier. This steady increase indicates that the network is attracting more users, while also reflecting a growing level of activity and usage.

Notably, the upward trend of UAA coincides with the bounce back of ADA's price – a sign that interest in Cardano is becoming stronger from both user and investor perspectives.

Cardano network data | Source: SantimentAdditionally, the ratio of profitable/loss trading volume also recorded a significant surge, reaching 4.808 on Friday – nearly three times the figure of 1.790 from the previous day. This ratio indicates that the majority of transactions are being conducted at prices higher than the average price of the token the last time it was moved – a clear signal that the demand for ADA and activity on the Cardano network is increasing significantly.

ADA derivative data sends optimistic signals: Buyers dominate

The derivative indicators for ADA are sending clear positive signals. According to data from CoinGlass, OI has increased by 12% in the past 24 hours, reaching 1.43 billion USD – indicating that new capital is flowing into the market.

Typically, an increase in open interest (OI) accompanied by a strong price uptrend is a sign that new money is entering the market and investors are reinforcing their confidence in the bullish trend. When the funding rate indicator also rises in parallel, it further confirms that the advantage is clearly leaning towards the buyers.

Specifically, the funding rate calculated based on OI has increased from 0.0085% on Thursday to 0.0107% – indicating that buyers are willing to pay a higher fee to maintain Long positions. This is a signal that the market strongly supports the bullish expectations for ADA in the short term.

ADA derivative data | Source: Coinglass## ADA breaks the downtrend channel, preparing for the next upward move.

ADA has just escaped the descending channel on the 4-hour time frame, marking a new positive move in the recent bounce back. At the time of writing, ADA is trading around the level of 0.8 USD.

The price level of 0.78 USD – which was previously a resistance zone of the downward channel – has now turned into new support, strengthening the foundation for ADA's potential to continue moving upwards. If buying pressure remains stable, ADA could target the next goal at the 0.85 USD zone – a price level that was last tested on July 23.

Technical signals are leaning towards a bullish trend: the MACD indicator shows positive momentum with the signal line trending upwards and the histogram expanding in green – reflecting a strengthening upward momentum. However, the RSI is currently at 69 and moving sideways – near the overbought zone – indicating that the market may need a short correction before establishing a new peak.

On the contrary, if ADA loses the support level of 0.78 USD, selling pressure may push the price back to the EMA 100 period line, currently located around 0.75 USD – an important technical level to watch.

ADA price chart | Source: TradingViewTaylor