Cardano is currently showing a lot of bullish momentum as buyers have been returning to the crypto market. While its price is still below the $1 mark, there have been a lot of activity surrounding the altcoin that could suggest a run-up is on the horizon. These span from rising interest from crypto traders and investors alike, to crypto analysts predicting that technicals are showing a bullish reversal on the chart.
Cardano Open Interest Rises 25%
One major development for Cardano in the last few days has been the rise in attention that the altcoin has been garnering from the market. This is shown in the steady rise in the open interest of the cryptocurrency over the last few weeks, and culminating in a major jump in a 24-hour period.
Data from Coinglass shows that between May 21 and May 22, the Cardano open interest went from $902.27 million to $958.05 million. This meant a 25% increase in the open interest in just a 24-hour period. This is also a long way from the $715.01 million low of May so far, especially as investors have begun to make their bets.
Generally, the open interest represents the amount of open futures or options contracts of a particular cryptocurrency. It takes into account the total amount that has been invested in ADA derivatives products at any time, taking both the long and short positions. This means that if the open interest is falling, then crypto traders are placing less bets and if the open interest is rising, then they are taking more positions in the altcoin.
As the open interest rises and more bets are placed, it seems that bears are expecting the Cardano price to crash from here. This is shown by the Long/Short ratio which shows 49.71% of all bets are long and 50.29% of bets are long.
ADA Breaks Out Of Falling Wedge Pattern
After the previous price crash, Cardano fell back into a falling wedge pattern as the altcoin traded in a tight range. Now, as the Bitcoin price has put in a new all-time high and altcoins are falling suit, Cardano is breaking out of this falling wedge pattern.
Crypto analyst JimmyX highlighted this in an X post, showing a path for the breakout. The price is already moving toward the first target of $0.9508 after crossing the $0.8 mark. The next two targets for this breakout are $1.0295 and $1.1316.
Featured image from Dall.E, chart from TradingView.com
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