Cardano Price Struggles To Push Higher With 62% Gains in Sight

Key Insights:

• Cardano price breaks above $0.8838, triggering bullish expectations for a move toward $1.43.
• Positive funding rate of 0.0240% may signal overheating in the derivatives market.
• OBV divergence hints at weakening buying momentum despite the breakout.

Cardano price has made an impressive recovery, climbing above the key $0.8838 resistance zone for the first time in months. The price action looks strong, with a 17% weekly surge. But on-chain metrics reveal a more cautious story; one that suggests the bulls might need to cool off before charging toward the $1.43 target.

Slightly Positive Net Flows After Weeks of Outflows; A Sign of Distribution?

One of the early warning signs comes from ADA’s spot exchange net flows. For weeks, Cardano saw persistent outflows, meaning more ADA was leaving exchanges than entering. This is usually a bullish sign, as it shows long-term holders moving assets to cold storage. But on July 21, that changed.

The tide turned with a small inflow of $3.35 million worth of ADA back onto exchanges. While that’s not a massive number, it’s notable because it comes after a long dry spell. When coins move back to exchanges, especially after a strong price move, it often signals that holders might be preparing to sell.

This could be a temporary breather, or the start of larger distribution. So while the breakout above $0.8838 is bullish, traders should watch net flows carefully in the coming days.

Funding Rates Spike; Sign of Overheating in the Derivatives Market?

Over in the derivatives market, things are heating up. The OI-weighted funding rate for ADA hit 0.024% on July 21; the second highest level since April.

In simple terms, a funding rate is the fee paid between traders in a perpetual futures contract. When it spikes this high, it means most traders are going long (betting on price going up), and they’re willing to pay extra to hold those positions. This means increased leverage.

A high funding rate like this suggests bullish sentiment is very crowded. When too many people are betting in the same direction, the risk of a short-term pullback increases. It’s not a reason to panic, but it does mean the market may be slightly overheated; especially if the rate climbs further while price stagnates.

In short, high funding rates reflect optimism; but also signal that the price might need a breather.

OBV Divergence Flashes Warning; Momentum Could Be Weakening

Another important signal comes from the On-Balance Volume (OBV) indicator. OBV tracks buying and selling pressure by adding volume on green days and subtracting it on red days. If price is rising but OBV is flat or falling, it usually means the rally is losing strength.

Back on May 13, when ADA hit $0.8641, the OBV was significantly higher than it is now; even though ADA has now broken above that level, hitting $0.88 on July 21. That creates a bearish divergence: price is higher, but the buying volume isn’t backing it up.

This kind of divergence doesn’t always cause an immediate drop, but it often shows up before a correction or sideways chop. So, while the breakout is real, momentum might be fading under the hood.

Cardano Price Breaks Resistance, But Can It Reach $1.43?

From a technical standpoint, ADA has broken through a major resistance at $0.8838. The next immediate psychological level is $1.00, which could act as a short-term hurdle. But beyond that, Fibonacci extensions point toward $1.0828 and even $1.43 as potential targets.

These targets come from a trend-based Fibonacci extension; a tool used by traders to project how far a breakout can go based on past swing highs and lows. In this case, the 2.618 Fibonacci level lands right at $1.4367, giving that $1.43 mark strong technical backing.

Regardless of the nature of correction, the current market conditions might ensure that the Cardano price doesn’t dip under 0.78.

However, for Cardano price to rally another 61% and hit the $1.43 projection, broader market tailwinds would be crucial. One supporting argument comes from Clarity’s recent ecosystem maturity framework, which categorizes Cardano as “Likely Mature,” placing it in the same league as Bitcoin and Ethereum.

This label signals that ADA meets core decentralization criteria such as validator diversity and fair token distribution, traits regulators tend to favor in ETF considerations.

Speculative chatter is already building around the possibility of an ADA ETF. A recent tweet from crypto analyst Dan Gambardello floated a hypothetical scenario where, if Bitcoin hits $250K and ADA reaches 4.5% market dominance, Cardano could trade at $12.86.