Cardano (ADA) Price Charges Towards $0.50 amid $80 Million Capital Inflows

Cardano (ADA) price prodded above the $0.46 level on Thursday June 6, up 6% within the weekly timeframe, recent trends observed in the derivatives markets suggest that ADA bulls are gunning for a major breakout.

Cardano price is up 6% this week

In May 2024, Cardano price struggled for momentum as the Ethereum ETF approval impacted rival Proof-of-Stake network negatively. In the last 10 days of May, ADA entered a prolonged decline.

However, since the start of June 2024, there has been an uptick in bullish sentiment surrounding the Cardano network.

The trends observed in June 2024, suggest that the ADA price decline in the last week of May appears to have attracted savvy investors looking to buy the dip.

Since, Cardano price dipped below the $0.44 of May 31, bulls have swung straight into action. As seen in the chart above, ADA’s price has now surged 6% within the weekly timeframe, peaking at $0.463 on June 6.

Cardano Open Interest Nearing $300M

Amid the bullish expectations surrounding the upcoming US jobs data, on-chain data shows that ADA speculative traders have been going all in on LONG futures contracts this week.

Looking at the 6% ADA price surge this week bulls have evidently now gained a foothold in the Cardano markets. However, a closer look at ADA open interest during this uptrend period leaves clues of a much larger price breakout ahead.

Santiment chart below presents the dollar value of all active ADA-denominated futures contracts.

As Cardano struggled to find the demand in the last week of May 2024, the trading activity dwindled, driving the 24-hour volume to a 30-day low of $166 million on June 1. However, the downward trajectory has flipped since then, as the bulls began June 2024 on a strong foot.

The chart above shows how Cardano open interest been on a steady uptrend since the start of May 2024. In concrete terms, Cardano open interest has gone from $190 million on May 1 to $268 million at close of June 6, reflecting a 41% surge in capital inflows over the past month.

When open interest surges persistently over an extended period, it puts bullish pressure on the asset price for two main reasons:

Increased Capital Inflows: A steady rise in open interest indicates more capital is entering the market. This influx of funds generally supports higher prices as demand outstrips supply.

Positive Market Sentiment: Sustained growth in open interest often reflects growing investor confidence. As more traders open new positions, it signals a strong belief in the asset’s upward potential, further driving the price up.

Cardano Price Forecast: Will $0.50 Resistance Cave?

Cardano’s price has surged 6% in the last four days, with open interest increasing by over $80 million. This growing bullish momentum across the ADA markets in June 2024, suggests a rapid price breakout above $0.50 could be next move.

However, IntoTheBlock’s GIOM data identifies the $0.48 territory as the major resistance level to beat in the near term.

As seen above, 94,920 addresses had acquired 1.64 billion ADA at the maximum price of $0.48. Considering they had been holding at a loss for weeks, many of those holders could opt to book profits early.

If ADA bulls can manage to scale the $0.48 resistance sell-wall, they could extend the rally above the $0.50 milestone as predicted

But conversely, if the bulls succumb to another correction phase, the $0.44 cluster could offer significant short-term support.