The cryptocurrency market has turned green following a poor start to the week. Bitcoin and Ether are up 1% and 2% respectively over the last 24 hours.
ADA, the native coin of the Cardano blockchain, is up 5% during that period, making it the second-best performer among the top 20 cryptocurrencies by market cap.
ADA’s pump is fueled by improved derivatives sentiment as its funding rates turn positive alongside rising long bets among traders.
Momentum indicators also point to a short-term recovery, with the bearish momentum now fading.
Derivatives data show improved sentiment
Cardano has been performing excellently since Wednesday, with its rally supported by its onchain derivatives data.
According to CoinGlass, ADA’s OI-Weighted Funding Rate data shows that the number of traders betting for the price to dip is lower than those expecting it to surge higher.
The metric turned positive on Wednesday and now reads 0.0045%, indicating that longs are paying shorts. Usually, when the funding rates flip positive, ADA’s price has recorded excellent gains.
Furthermore, CoinGlass data shows that the long-to-short ratio for ADA reads 1.09 on Thursday.
This ratio surpassing one suggests that more traders are betting on Cardano’s price to rally.
ADAeyes the $0.3056 resistance level
The ADA/USD 4H chart is one of the most bullish among the top 20 cryptocurrencies.
At press time, ADA is trading at $0.2689 and could rally higher in the near term.
Cardano has surpassed its 9-day Simple Moving Average (SMA), which currently reads $0.266, suggesting that the bearish momentum is fading in the near term.
The momentum indicators have also switched bullish, indicating that ADA could surge higher.
The Moving Average Convergence Divergence (MACD) lines are converging close to the neutral zone, indicating that the downside momentum for the ADA/USD pair is fading.
The Relative Strength Index stands at 53, above the neutral zone, and edging higher. If the RSI keeps increasing, ADA would enter the overbought region, and this would see its price rally higher.
However, while the bulls are regaining control, the descending trend line from $0.427 limits rebounds.
ADA could also face resistance around the $0.301 region, with another major hurdle at $0.325.
If the daily candle closes above the $0.301 resistance, ADA could embark on a rally that allows it to hit the weekly resistance level at $0.325.
However, failure to close above the $0.301 zone could see ADA retest the 9-day SMA at $0.266.
This would see the sellers also regain control of the trend. An extended bearish run could see sellers push ADA’s price lower towards the Friday low of $0.22.
Currently, the market conditions are positive for ADA, and the coin could rally higher over the next few hours and days.
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