Cardano(ADA) successfully defended at $0.42, the reason why 'breaking through resistance' is key

Cardano has recently shown signs of stabilization after a downward trend. It rose about 5% compared to the previous day, securing the $0.42 level. The reason it’s unlikely to be just a technical rebound(dead cat bounce) is because of the clear movement of large-scale funds. Market participants interpret this price stabilization as a sign of “bottom formation.” Despite significant profit-taking sell-offs after the sharp rise, the market absorbed them well, especially as large buy movements from on-chain data and the derivatives market were detected.

Signals of an Uptrend from Capital Flows

The most reliable indicator for price movement is the direction of capital. According to CryptoQuant analysis, even during recent correction phases, whale investors have quietly accumulated positions. The pattern where institutional investors absorb retail investors’ panic selling has historically been a strong signal of trend reversal.

Changes in the derivatives market are also noteworthy. Based on CoinGlass data, the open interest(OI) weighted funding rate has turned to positive(1.4%). This indicates that long position investors are willing to bear interest costs to maintain the upward trend. At the same time, the influence of the short-selling forces is weakening, and leveraged funds expecting further gains are beginning to dominate the market.

Understanding TVL(Total Value Locked) helps gauge market depth, and similarly, the shift of funding rates to positive(plus) is an important indicator of how solid the buy support has become. There have been multiple instances where ADA rebounded immediately after funding rates turned positive, increasing market optimism.

Technical Evidence from Charts

Technical signals are also stacking positively. The breakout of the Falling Wedge( pattern completed last week was a textbook precursor to a bullish reversal. Technical indicators are also worth noting. The RSI)Relative Strength Index( has moved above 30 from oversold levels, and the MACD indicator is approaching a golden cross, indicating accumulating upward momentum.

The most critical task now is to break through resistance. The immediate goal is to clearly surpass $0.49 on the daily chart. If this level is definitively crossed on a closing basis, retesting the psychological threshold of $0.50 is expected to be just a matter of time.

However, there are variables. If a temporary sell-off occurs due to worsening macro conditions like Bitcoin, the final defense line is likely to be $0.39. Currently, ADA’s price is around $0.36, with a -1.93% change over the past 24 hours. If this support level is broken, the current upward momentum could be nullified, so close monitoring of key support zones is necessary.