Layer-1 (L1) coin Cardano has recorded a 10% gain over the past week, positioning itself for an extended rally.
The altcoin is now trading close to its 20-day Exponential Moving Average (EMA), a key technical level that, if breached, could validate the ongoing rally and open the door to fresh highs.
ADA currently trades near its 20-day EMA and is poised to climb above it. This key moving average measures an asset’s average price over the past 20 trading days, giving more weight to recent prices.
When an asset is about to rally above its 20-day EMA, it signals a shift in short-term momentum from bearish to bullish. This crossover signals that ADA buying pressure is increasing and confirms that the asset has entered an upward trend.
ADA’s successful break above the 20-day EMA would signal renewed momentum and act as a dynamic support level for the coin’s price, giving buyers more control.
On-chain metrics further support the bullish outlook. According to Santiment, ADA’s Network Realized Profit/Loss (NPL) has turned negative, indicating that most holders are currently at a loss.
Historically, this discourages selling pressure as traders are less willing to part with their assets at a loss. This behavior encourages longer holding periods, which in turn tightens supply and can drive up ADA’s price in the short term.
On the ADA/USD one-day chart, the coin’s positive Chaikin Money Flow (CMF) reinforces this bullish outlook. At press time, this indicator, which measures how money flows into and out of an asset, is at 0.04.
A positive CMF reading like this indicates that buying pressure outweighs selling pressure. It reflects strong capital inflows into ADA, suggesting that its investors are accumulating rather than offloading their positions. ADA could extend its rally and climb to $0.70 if this trend persists.
However, if profit-taking resumes, ADA could reverse its rally and fall to $0.55.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.