ADA Forms Inverse Head and Shoulders Pattern, But This 50MA Level Must Break for a Bullish Reversal

ADA shows inverse head and shoulders on 4H chart; a 50MA breakout could confirm bullish reversal.

Daily volume rose 8.52% to $657.95M as market activity increases around ADA’s potential rebound.

ADA futures bets total $694M, reflecting strong trader interest and possible support for upward move.

Cardano (ADA) is showing signs of a possible reversal after a long downtrend, with analysts noting a potential inverse head and shoulders forming on the 4-hour chart. The pattern is gaining attention as ADA attempts to reclaim its 50-period moving average. At press time, ADA trades at $0.5644.

Technical Formation Points Toward Reversal Potential

According to an observation by Sssebi, the structure forming on the 4-hour chart resembles an inverse head and shoulders. This pattern typically signals a shift from a bearish to a bullish trend

For this to confirm, ADA needs to break and hold above the 50MA, which remains a key resistance level. Volume is a key factor. If ADA crosses the 50MA with rising trading volume, then price action could target the upper trendline of the falling channel. Based on the current chart setup, this target is near $0.65

Source: CryptoSmith(X)

CryptoSmith also pointed out that ADA is approaching a critical trendline. A similar past breakout resulted in a 240% price increase, with analysts suggesting that a new breakout could push ADA toward $2.60 again.

Market Structure and Investor Behavior

Trading volume over the past 24 hours increased by 8.52%, reaching $657.95 million, according to CoinMarketCap data. This reflects steady investor participation as ADA attempts a recovery from its recent decline

Source: CoinMarketCap

The broader crypto market also rose 1.44% in the same period, providing some momentum. According to CoinMarketCap, ADA's market cap stands at $19.96 billion, ranking it 10th among all digital assets. Futures traders have placed bets equivalent to $694 million on ADA, which could add support if buying continues

The current circulating supply is 35.37 billion ADA out of a total cap of 45 billion, maintaining scarcity in the market. If ADA sustains buying interest and breaks above key technical levels, the structure may lead to further gains.

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