Cardano (ADA) signals a bounce back, is a strong breakout approaching?

Cardano (ADA) is striving to establish an upward trend on the price chart, but the current market sentiment has not yet fully tilted towards the bulls. Although the volatility of Bitcoin (BTC) at the beginning of the week provided some short-term momentum, ADA has not recorded a stable cash flow throughout June. On the contrary, selling pressure has dominated most of the time.

Not only ADA is facing difficulties. The total market capitalization of altcoins (TOTAL2) – representing the entire cryptocurrency market excluding Bitcoin – has continuously failed to conquer the threshold of 1.25 trillion USD since February.

TOTAL2 daily chart | Source: TradingViewThe latest effort on June 11 was also quickly extinguished as the wave of selling spread among altcoin investors due to concerns over escalating geopolitical tensions in the Middle East. This correction also led to a temporary drop of Bitcoin below the $100,000 mark, further reinforcing the gloomy picture of the market in the short term.

The lack of capital flow in the altcoin group in general, and ADA in particular, is becoming a major concern for both bulls and long-term investors. The question is: Will the market reverse soon?

Cardano is starting to show positive signals in the short term

In the past week, ADA has bounced back from the support level of $0.51 and established a higher low at the mark of $0.545 – a positive signal indicating that buying pressure is gradually returning. If this altcoin can break through the local peak of $0.594 recorded last Tuesday, the market structure will be reconfigured in a significantly more positive direction.

Daily ADA/USDT Chart | Source: TradingViewThe RSI indicator is also in sync with the price recovery momentum as it has consistently created higher lows in recent days – indicating that selling pressure has somewhat weakened. At the same time, the OBV indicator has recorded a slight rebound; if this upward momentum continues, it could be an early sign that buying pressure is recovering, opening up opportunities for ADA to move towards the resistance area of $0.62 – $0.65 in the short term.

However, for traders considering opening Long positions, it is important to note: the prevailing trend is still bearish, following a sharp decline from the $0.73 mark at the beginning of June. Therefore, any buying strategy at this time should be implemented flexibly – prioritizing quick profit-taking and clear stop-loss – as these are still trades that go against the market trend.

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