Cardano (ADA) has surged past the upper boundary of its descending triangle after over 60 days of confinement. This breakout has aligned with increased activity from large ADA holders, sparking bullish sentiment around the altcoin. As momentum builds, ADA’s price could potentially rally by another 33%.
Cardano Escapes Bearish Trend
In the past 24 hours, Cardano’s price jumped by 3%, surpassing the upper line of its descending triangle. This triangle pattern forms when an asset’s price moves between two converging trendlines: a downward-sloping resistance line and a flat or slightly upward-sloping support line. ADA first entered this pattern on July 16. It made multiple attempts to break the resistance line but failed each time.
However, following the Federal Reserve’s rate cut on Wednesday, a positive shift in market sentiment has boosted ADA above this crucial resistance. When an asset’s price breaks out from a descending triangle, it indicates that buyers have overtaken the sellers. This bullish breakout suggests a potential new uptrend is beginning.
Whale Activity Drives ADA Price Up
ADA’s breakout is not just a result of improved market sentiment but also whale activity. On-chain data reveals that holders with between 100 million and 1 billion ADA have increased their accumulation since early September. Since September 1, this group of ADA holders has purchased 270 million tokens worth over $97 million at current prices. These whales now hold 2.88 billion ADA, marking their highest total since April 2023.
Futures Traders Bet on ADA Rally
The recent price surge has also sparked growth in ADA’s derivatives market. Over the past 24 hours, open interest, which measures outstanding futures and options contracts, has risen by 4%. A rise in open interest indicates more participants are entering the market, increasing trading volume.
Moreover, Cardano’s Chaikin Money Flow (CMF), which tracks capital inflows, currently sits at 0.08, signaling strong market demand. If this upward trend continues, Cardano could rise further, potentially hitting $0.47. However, if the breakout retest fails, ADA might drop back to support at $0.31.
