Cardano (ADA) is mimicking the ongoing steady recovery in the broader market and had surged slightly today, April 21, to trade at $0.25 at press time. These gains have coincided with a spike in ADA futures volumes at the CME during the last three trading days. As this happens, the price of Cardano now seems to be breaking out, and three reasons stand out explaining why it may reach $0.30 soon.
Why Cardano Price Could Hit $0.30 By April End
Cardano has been under bearish pressure since mid-January. During this time, the price has dropped by 68% from the January 14 high of $0.42. This drop is largely because of dips across the broader cryptocurrency market due to the US-Iran war, but now, the tide appears to be shifting.
In the last week, the crypto fear and greed index has increased from 12 to 33. While it remains in bear territory, the rise suggests that the bearish pressure that has been pushing prices lower is easing. This creates room for ADA to rally. A recent ADA price analysis noted that if the $0.28 target breaks, $0.30 is next. Here’s why this level may be realized soon.
CME Futures Volumes Are Rising
Data from CME Group shows a significant spike in Cardano futures trading volumes in the last three trading days. On April 17, the total ADA contracts traded jumped to 69, a notable increase from 27 contracts traded on April 15. This shows a 155% surge in just two days.
This increase means that there are new traders who are entering the market. These traders could be taking up positions anticipating a catalyst, such as network upgrades that could trigger a rally. If the CME futures volumes continue to increase, traders should also brace for volatility
Looming Short Squeeze May Push Cardano Price Higher
The choppy moves posted by ADA price in the last few months have caused a surge in short positioning by traders. This can be seen in the long/short ratio, which had dropped to $0.73 at press time. Additionally, the funding rate had turned negative, indicating that traders are willing to pay more to keep their short positions open.
A long/short ratio of 0.73 increases the possibility of a short squeeze. If Cardano price makes a sudden move upwards, the cascade of short liquidation will lead to forced buying. As a result, ADA will move higher.
Wedge Breakout Signals $0.30 as a Likely Target
As institutional traders take positions amid a looming short squeeze, a falling wedge pattern formation now signals that $0.30 could be the next stop for Cardano price. The token has broken out of the upper trendline resistance, but it needs to make several consecutive closes above it to confirm a strong bullish reversal.
The depth of the wedge pattern indicates that a move from the $0.25 resistance level to the target price of $0.30 will constitute a 23% move.Currently, the RSI shows that buyers are remaining hesitant at this resistance level. Sellers could be entering the market at this point to take profits after previous trends led to a failed breakout.
A move towards $0.30 will depend on strong buying activity. Therefore, traders should watch whether the RSI can make a higher high before confirming a bullish long-term Cardano price forecast.
In summary, Cardano price appears to be well-positioned for an upward move as institutions step in and a short squeeze looms. If the sentiment shifts and the broader market rallies, Cardano may hit $0.30 by April end.
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