Why is the price of Cardano (ADA) increasing today?

Cardano (ADA) has shown a strong recovery of 26% after falling to its psychological support at $0.90 on December 10. The rapid recovery has led to a higher position above the 50-day EMA level, which could lead to the next leg up.

ADA/BTC pair rises after EMA200 retest.

Strong daily returns on BTC have helped ADA's performance over the past few days. As noted on the chart, ADA/BTC has registered a retest of the 200-day EMA level on the 4-hour chart.

This indicator is often tested at higher lows, and a large enough departure from the EMA indicates a breakout trend in the “altcoin season”.

However, the altcoin season index briefly dipped below 75 after the recent liquidity event. It remains relatively high at 69, which means that altcoins such as ADA may continue to outperform BTC in the short term until the top crypto asset re-enters the price recovery as high as $104,670.

Related: 5 Reasons Crypto Dino Coins Like XRP, Tron, and ADA Are Going Parabolic

Cardano TVL increased by 84 million dollars

DeFi protocols on the Cardano network have risen sharply since December 10, boosting investor confidence. According to data from Defilama, ADA's total locked value (TVL) rose from $560 million to $644 million in 48 hours.

TVL's growth was led by Liquid ( Lender ), Minswap ( DEX ) and Indigo ( Lender ), each of which recorded a 10% increase in lock value over the past seven days.

Cardano's open interest (OI) increased by $140 million the previous day, reaching $830 million on December 10. While the OIA decreased from 1.18 billion dollars on December 3, the current increase is consistent with the price growth, which shows that it is sustainable. The interest of future traders.

However, from a technical point of view, Cardano should establish a more clear breakdown to strengthen the higher trend. As shown in the chart, despite the 26% rally, ADA faces resistance from a descending resistance trendline.

A clean break above would allow the altcoin to retest its recent high at $1.20, but the oscillator has yet to show signs of a bullish crossover. With the relative strength index (RSI) building momentum from the oversold range, the price can return to the fair value gap (FVG) between $1.03 and $1.05.

Related: Why Is Ethereum (ETH) Price Rising Today?

This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.