Volatility ahead? 2 Cardano bullish signals flash as ADA price rises 10% weekly

TL;DR

ADA’s valuation exceeded $0.35 for the first time this month, while the Cardano network witnessed an increase in some essential indicators. The RSI, on the other hand, recently entered overbought territory, indicating a possible price correction. Solid ADA performance

Cardano’s native token has performed quite well in recent days, witnessing a 10% price increase on a weekly basis and recovering $0.35.

ADA price, Source: CoinGecko

Its resurgence may have been partially fueled by the broader rise in the entire cryptocurrency market, where Bitcoin (BTC) rose to nearly $58,500, while Binance Coin (BNB) is eyeing the $550 target. ADA’s upward trend also coincides with the rise of essential metrics in the Cardano ecosystem.

According to IntoTheBlock, the “In the Money” indicator is up 8.3% daily, showing a bullish signal. This tool shows the change in the number of ADA investors who currently have paper benefits. As of now, the total proportion of those in the green is 23%, while 77% remains underwater.

In addition, the aggregate daily volume of ADA transactions (where each transaction exceeds $100,000) has reached $6.3 billion, representing a 5% increase on a 24-hour scale.

This development points to increased activity that could encourage other investors to jump on the bandwagon, thus injecting fresh capital into the ecosystem.

Separately, we’ll discuss ADA’s open interest, which has been rising in recent days and could indicate potential volatility. The metric, which refers to the total number of outstanding derivative contracts such as futures or options that have not yet been settled, recently surpassed $145 million for the first time since late August.

An increase in open interest usually indicates greater market participation, meaning more traders are joining the ecosystem. It is often a precursor to greater volatility and substantial price movement in either direction.

The bassist element

Contrary to the bullish indicators mentioned above, one metric suggests that the price of ADA could soon be heading south. This is the Relative Strength Index (RSI), which has crossed a ratio of 70 today (September 12).

It ranges from 0 to 100, with readings above 70 indicating that the asset is in overbought conditions and a correction could be in the offing. Conversely, a ratio below 30 means ADA is in oversold territory, indicating a potential price rally.

Recall that ADA’s RSI fell to 14.9 in early July (its lowest level this year), with the token’s valuation jumping 22% a few weeks later.

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