Cardano (ADA) is gradually reclaiming the $0.40 level at the time of writing on Tuesday, signaling a cautiously improving sentiment across the broader cryptocurrency market. The rebound from the intraday low near $0.38 has been fueled by renewed optimism after US core inflation data came in below expectations, reinforcing investor confidence and easing macroeconomic concerns.
The latest price action suggests that ADA could be positioning itself for a short-term breakout, provided broader market conditions remain supportive.
Cardano Rises as US Inflation Data Strengthens Market Sentiment
The latest US Consumer Price Index (CPI) report showed headline inflation rising 2.7% year over year in December, matching market expectations. More importantly, data from the US Bureau of Labor Statistics (BLS) revealed that core CPI increased by just 2.6%, slightly below the forecast of 2.7%.
This moderation in core inflation â which excludes food and energy prices â indicates that underlying price pressures may be easing. As a result, expectations have grown that US monetary policy could remain less restrictive in the coming months.
Crypto markets responded positively following the CPI release, with ADA climbing back above the $0.40 threshold. If this recovery maintains momentum, capital inflows could gradually return to digital assets ahead of the Federal Reserveâs policy meeting later this month.
That said, most market participants believe that a Fed decision to keep interest rates within the 3.50%â3.75% range has already been largely priced in, limiting the scope for an immediate macro-driven rally.
Futures Market Signals Caution as Retail Interest Remains Weak
Despite the recent price rebound, retail interest in Cardano remains subdued following the October 10 flash crash, during which multiple recovery attempts were quickly met with selling pressure.
According to CoinGlass, ADA futures Open Interest (OI) averaged around $742 million on Tuesday, down from $780 million on Monday and $844 million earlier this month. This marks a continued decline from the October 10 level of approximately $1.51 billion, which followed an all-time high of $1.95 billion in mid-September.
If this downward trend in open interest persists, it could indicate weakening trader conviction in ADAâs ability to sustain a strong bullish trend. For a more durable upside move, the market would need to see a clear and consistent recovery in OI, signaling renewed risk appetite and participation from leveraged traders.
Technical Outlook: Cardano Reclaims a Key Support Zone
From a technical perspective, Cardano is holding firmly near $0.40, supported by improving macro sentiment following the softer US inflation data.
Notably, ADA remains above both the 50-period and 100-period Exponential Moving Averages (EMA), which are currently clustered around the $0.39 region and acting as important short-term support levels.
On the 4-hour chart, the Relative Strength Index (RSI) has climbed to 54, suggesting that momentum is gradually shifting in favor of buyers. A continued rise in RSI could serve as a catalyst for a stronger short-term recovery.
At the same time, the MACD indicator is showing early signs of a bullish divergence. If the histogram bars above the zero line continue to expand, investor risk tolerance may improve further.
A sustained daily close above the 200-day EMA near $0.39 would be a critical confirmation signal for the bullish short-term structure. Such a move could open the door for a push above $0.42, while a retest of the January high at $0.437 would require an additional upside move of nearly 10% from current levels.
Conclusion
Cardanoâs recent rebound reflects improving macro conditions and a broader recovery in crypto sentiment following softer US inflation data. However, declining futures open interest and muted retail participation suggest that caution remains warranted.
For ADA to establish a sustainable uptrend, both technical confirmation and renewed participation from derivatives markets will be essential in the coming sessions.
This article is for informational purposes only and does not constitute financial or investment advice. Readers should conduct their own research before making any investment decisions. The author is not responsible for any financial losses.
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