Cardano (ADA) Price Boosted by Rising Spot and Futures Volume

The price of Cardano (ADA) has risen above a crucial support level and could experience a strong rally in May, especially with the increased volume in the spot market and the open interest in the futures market.

Today, the price of ADA is trading at $0.70, and it has risen by almost 40% from its low in April with the daily volume in the spot market reaching $700 million.

Also, the open interest in the futures market is above its April lows and the funding rate is still positive, which could propel the ADA price to surge soon.

Cardano Price Analysis: ADA Boosted By Rising Spot And Futures Volume

A potential bullish catalyst for the price of Cardano is that there are emerging signs of demand in the futures and spot market. As per CoinGecko, the trailing seven-day volume of Cardano jumped to over $700 million on Thursday.

This continues a trend that started late last month when the daily volume has been high, especially during weekdays, with its volume surging to $1.035 billion on April 25.

A high volume, especially when a cryptocurrency is experiencing a surge, is a sign of increased demand from both retail and institutional investors. The volume on both centralized and decentralized exchanges can also increase when a crypto is crashing, as holders become frantic and sell their coins in a panic.

Also, notice how the price of ADA has stalled whenever the volume dries up, which could be a sign that the bulls are getting tired and might need some rest.

In line with this, the price of Cardano could rise as the open interest in the futures market increases. According to CoinGlass, the open interest in the futures market stood at $782 million on Thursday.

While this figure is lower than its weekly high, it is still much higher than the April low of $576 million.

Open interest is a crucial metric in the futures market, as it measures the number of unfilled call and put trades in the futures market. Usually, the interest increases when a cryptocurrency is in an uptrend. A reversal usually happens when the OI overshoots, as it did in November and March.

However, do note that a high open interest doesn’t necessarily translate to a strong trend. For example, the price of Bitcoin (BTC) has been ranging despite the futures open interest remaining above $10 billion since early March.

Furthermore, confirming a potential bull run for the price of ADA is the fact that the funding rate has turned positive. It has surged to 0.65, which means that long position holders are now paying a small fee to those predicting that it will fall. A positive figure usually bodes well for the price of a cryptocurrency in the short term.

ADA Price Technical Analysis: Break And Retest Hints Of A Bull Run

The daily chart of the price of ADA shows that the coin has formed an inverse head and shoulders pattern, a popular bullish reversal sign.

The price of ADA has also formed a large falling wedge pattern, which is shown in red in the chart below. This pattern occurs when there are two falling and converging trendlines. These lines are drawn by connecting the lower lows and higher highs over a certain period. Cardano has now moved above the upper side of the wedge. After doing so, it has retested that trendline, which could confirm the breakout.

On top of this, it created a double-bottom pattern at $0.5212, with a neckline is at $1.1705.

Therefore, the most likely price prediction for ADA is for it to surge and reach the resistance at $1.1705, which is an increase of about 67% from the current level.

A drop below the double-bottom pattern at $0.5212 will cancel the bullish outlook. It will also risk the coin dropping to $0.2761, its lowest level last year.