Cardano: Is a recovery on the cards?

• Cardano continued to recover, with a 2% increase at press time.
• ADA remained below the neutral line on its RSI.

Cardano [ADA] has shown notable upward movements in recent days, signaling continued recovery. AMBCrypto’s analysis of ADA’s daily timeframe chart showed three consecutive days of upward trends.

Cardano commences recovery 

This marked a recovery from the previous downtrends that started around the 13th of January, when the price was around $0.58. As of press time, ADA was trading at around $0.49, showing an increase of over 2%.

The total rise over the last three days was now over 6%. 

Source: Trading View

Despite the commendable recovery, ADA continued to trade below its short-moving average (yellow line). Also, the yellow line acted as resistance at around $0.56.

While the upward trend has not completely reversed the bearish trend, it has notably weakened it. The Relative Strength Index (RSI) was above 40 at the time of this writing, indicating a rising trend.

Cardano’s buyers take a less aggressive stance

The excitement surrounding Cardano’s price rise has not yet translated into increased activity among traders, as evidenced by metrics on Coinglass.

An examination of Cardano’s Funding Rate showed a consistently positive trend over the past few months.

Despite the positive trends observed, the trend was nearly flat. This suggests that while buyers maintain control, their aggressiveness has waned. 

Additionally, an analysis of the Open Interest chart showed a lack of substantial movement in recent times. As of this writing, the Open Interest was around $240.6 million.

ADA supply in profit declines

As the price of Cardano experienced a decline, the percentage of the total supply in a profitable position also decreased, as illustrated by the Santiment chart.

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AMBCrypto’s analysis of the chart showed that the profit in supply decreased from its peak of over 70% in December to the 60% range.

At the time of this writing, the profit in supply was around 66%, signifying that the press time supply in profit was around 22.4 billion.

Source: Santiment