Cardano’s price has experienced a 15% increase in the first three days of May 2024, but has since struggled to surpass the psychological resistance level of $0.45. Crucial market data provides insights into the prevailing social sentiment among ADA traders.
The rally in ADA’s price halted at $0.45, performing below the average market rate. At the beginning of May 2024, the cryptocurrency market entered a recovery phase, resulting in altcoins’ global market capitalization surging by $142 billion over the past week.
Initially, the ADA price surged by 15% from $0.42 to $0.48 in the first three days of the month. However, the failure to reclaim the $0.50 milestone led to exhausted Cardano bulls surrendering most of the initial gains. As of May 7, ADA prices retraced to around $0.45.
At current prices, ADA is up 7.7% for the month. However, this performance seems underwhelming when compared to the current TOTAL2 chart trends, which capture the overall performance of all crypto assets excluding Bitcoin (BTC). The 142 billion growth on the TOTAL2 chart represents a 15% boost in the overall altcoin markets for May 2024 so far.
Despite ADA’s underperformance amidst the positive sentiment surrounding the altcoin market, some strategic traders have been observed placing bullish bets on ADA. Coinglass’ Open Interest metric tracks changes in the value of capital invested in perpetual futures contracts for a specific crypto asset, providing insights into investors’ participation rate and sentiment direction.
ADA’s open interest stood at $205.7 million on May 1, but it has since increased by $10.5 million to reach $216.2 million as of May 7. This $11.5 million increase represents a 6% surge in open interest over the past week, coinciding with a 7% growth in Cardano’s price. Persistent increases in open interest during a price uptrend suggest that the majority of Cardano holders are placing additional bets in hopes of achieving amplified gains when spot prices surge in the coming days.
As of the time of writing, Cardano’s price is trading at $0.45, down 8% from the monthly peak of $0.48 recorded on May 3. However, considering the $10.5 million surge in open interest, ADA’s price appears poised to make another attempt at reclaiming $0.50 in May 2024.
Analyzing the Bollinger band indicator on Cardano’s daily price chart, bulls face strong resistance at the 20-day SMA price level of $0.47. Flipping this critical resistance level could pave the way for ADA’s price to break above $0.50 for the first time since April 23. In the event of a bearish price reversal, the $0.43 buy wall could provide short-term support, as indicated by the lower-limit Bollinger band indicator.
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