Cardano rebounds: Can ADA break out toward $0.40?

• Cardano saw a 1.8% rise in the past week, trading at $0.3584 after rebounding from support.
• ADA’s ascending triangle pattern and increasing retail interest signaled a potential bullish breakout.

Cardano [ADA] is gradually showing signs of recovery after a recent downturn that pushed its price to as low as $0.33 earlier this month.

Over the past week, ADA has increased by 1.8%, with an additional 1.3% uptick in the past 24 hours, bringing its current trading price to $0.3584 at the time of writing. 

This rise in value comes at a time when the broader cryptocurrency market has been struggling to regain momentum, and Cardano’s upward movement has sparked renewed interest from investors.

ADA on the verge of a rally to $0.40?

One key factor driving this renewed optimism around ADA is the technical pattern forming on its daily chart.

The asset recently rejected a major support zone within an ascending triangle pattern, a signal that often suggests the potential for a bullish breakout. 

If this trend holds, ADA could continue to rise and possibly hit its next significant resistance level of $0.40.

For context, an ascending triangle pattern is a popular formation in technical analysis that indicates a potential breakout to the upside. 

This pattern is characterized by a series of higher lows, forming the rising trendline, while the upper boundary remains horizontal.

When an asset’s price consistently tests resistance but manages to form higher lows, it suggests increasing buying pressure. Once the price breaks above the resistance, a rally follows.

In ADA’s case, the ascending triangle pattern has formed as the asset faces consistent rejection between the $0.27 and $0.33 price range, creating a solid support level.

After each rejection from this zone, ADA’s price has historically increased, signaling that the asset may now be primed for another upward move.

Given the latest rejection from the support zone, it is now speculated whether ADA could soon surge toward the $0.40 resistance level, especially if broader market conditions turn favorable.

Fundamentals support positive outlook

While the technical outlook suggested a bullish continuation, Cardano’s fundamentals further supported the case for price growth. Data from Santiment revealed an increase in ADA’s retail interest in recent weeks. 

Source: Santiment

Although the number of active addresses dropped following a peak at 137,000 earlier this month, it rebounded at press time, reaching 29,000.

This resurgence in retail activity could provide additional momentum for ADA’s price, as it reflected growing interest in the asset among individual investors.

Read Cardano’s [ADA] Price Prediction 2024–2025

Moreover, per Coinglass, ADA’s Open Interest had increased by 4.72%, valued at $231.29 million during this period. However, it had declined 0.69% to $261.65 million. 

Source: Coinglass

Despite this minor dip, the overall rise in Open Interest suggested that traders were positioning themselves for further price action in ADA, indicating confidence in its short-term potential.