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▲ Cardano (ADA)/ChatGPT generated image ©
Cardano (ADA) is undergoing a short-term correction after surging over 30% last week, but bullish sentiment still appears to be maintained in the derivatives market. Analysis suggests that the upward momentum is alive, with open interest significantly increasing and funding rates turning positive.
According to investment specialized media FXStreet on July 6 (local time), Cardano showed a consolidation pattern, slightly declining around $0.188 on the day after surging over 31% last week. The price is maintaining the key support level of the 50-day Exponential Moving Average (EMA) at $0.186, and if this level holds, there is a possibility that the upward trend will continue.
In the derivatives market, investor sentiment showed cautious optimism. According to CoinGlass, Cardano's open interest increased to $515 million on Sunday, reaching its highest level since late May, and maintained around $472 million on Monday. The increase in open interest signifies expanding market participation and was interpreted as a signal supporting a generally bullish outlook. Furthermore, the open interest weighted funding rate turned positive last week and rose to 0.0080% on Monday, reflecting bullish sentiment where long positions pay costs to short positions.
However, not all indicators are optimistic. The long/short ratio approached its lowest level in about a month at 0.68. The media explained that a ratio below 1 means there are more investors expecting a decline than those betting on a rise, indicating that a cautious view still coexists in the derivatives market.
Technically, upward momentum is maintained. Cardano has recovered the 50-day EMA, but it is trading below the 100-day EMA of $0.218 and the 200-day EMA of $0.289, meaning it has not yet fully escaped the mid-to-long-term downward structure. The Relative Strength Index (RSI) remains in the bullish zone at 61, and the Moving Average Convergence Divergence (MACD) continues to show bullish signals. On the upside, the 38.2% Fibonacci retracement level of $0.195 is the first resistance, followed by $0.213 and the $0.218-$0.219 range as the next resistance levels. Conversely, on the downside, the 50-day EMA of $0.186 and the 23.6% Fibonacci retracement level of $0.173 were identified as key support levels.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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