Cardano (ADA) is riding a strong wave of momentum as the broader cryptocurrency market experiences a resurgence. With price action showing signs of a potential breakout, traders and investors are closely monitoring key technical levels that could determine ADA’s next major move. A recent $3.7 million short squeeze has added fuel to the rally, increasing bullish sentiment and drawing attention to critical resistance and support zones.
Current State of Cardano (ADA) Price
At the time of writing, Cardano is trading at $0.78**, marking a robust **10% gain over the past 24 hours** and reaching an intraday high of **$0.81. This upward movement has contributed over $3 billion in market capitalization growth, reinforcing investor confidence in the asset’s short-term trajectory.
👉 Discover how market momentum could push ADA toward $1 and beyond.
Surge in Trading Volume Signals Strong Buyer Interest
On May 9, ADA saw a significant spike in buy-side pressure, with trading volume surging by 101% to $1.6 billion according to on-chain data. This surge suggests growing institutional and retail interest, particularly as the price approaches pivotal resistance levels.
The most immediate resistance lies at $0.85**, a level tied to the **50% Fibonacci retracement** of the previous price swing. Breaking above this zone could open the path toward the psychologically significant **$1 mark, a target that has eluded ADA for several months.
Critical Technical Levels to Monitor
Technical analysis plays a central role in understanding Cardano’s current price behavior. Two key moving averages and a well-defined bullish channel are providing structure to the ongoing rally.
200-Day SMA: The Make-or-Break Level
The 200-day Simple Moving Average (SMA) at $0.78** has emerged as a crucial inflection point. ADA briefly broke above this level earlier in the week, reaching $0.81 before facing rejection. A decisive daily close above $0.78** would confirm a shift in market structure, signaling that long-term bears are losing control.
This level acts not only as resistance-turned-support but also as a sentiment barometer. A sustained move above it could trigger algorithmic and trend-following strategies to enter long positions, further accelerating upward momentum.
Bullish Channel Resistance: Confirming Trend Continuation
ADA has been consolidating within an ascending parallel channel for several weeks. The upper boundary of this channel represents dynamic resistance that must be overcome for the bullish thesis to remain intact.
Traders should watch for a clean breakout above this trendline, ideally accompanied by strong volume and RSI expansion above 60. If ADA successfully converts this resistance into support, it would validate a new phase of uptrend and increase the likelihood of a rally toward $1.00.
Support Levels: Defending Gains
While upside targets capture most attention, downside support levels are equally important in assessing risk.
The primary support sits at the 50-day SMA ($0.67)**. A drop below this level could signal weakening momentum and potentially lead to a retest of **$0.51, a multi-month low established during prior corrections.
However, as long as ADA continues forming higher highs and higher lows, and the Relative Strength Index (RSI) remains in bullish territory (above 50), the overall trend remains upward. A healthy pullback within the channel could even present a strategic entry opportunity for swing traders.
$3.7 Million Short Squeeze Fuels Momentum
One of the most compelling catalysts behind ADA’s recent surge is a substantial short squeeze, resulting in over **$3.7 million in liquidated short positions** within 24 hours. This is the largest wave of short liquidations in nearly two months, indicating that bearish bets were heavily concentrated around the $0.75–$0.80 range.
👉 See how market volatility can turn short squeezes into explosive rallies.
More Pain Ahead for Short Sellers?
According to liquidation heatmaps, an additional nearly $6 million in short positions** are at risk if ADA pushes past its intraday high of **$0.81. As price climbs, forced buying from leveraged short liquidations can create a feedback loop—each liquidation adds more buy pressure, driving price higher and triggering more exits.
This dynamic could be instrumental in propelling ADA toward $1, especially if broader market conditions remain favorable and Bitcoin maintains its upward trajectory.
Bullish Outlook: Can Cardano Reach $1?
Reaching $1 is no longer just speculative—it’s becoming technically feasible. For this to happen, two conditions must be met:
- A confirmed close above $0.78 (200-day SMA)
- Break and retest of the upper channel resistance as support
Once these levels are secured, the next major target becomes the $0.84–$0.85 Fibonacci zone, followed by a final leg toward $1.00.
If ADA sustains momentum past $1, it may outperform many mid-cap altcoins and attract renewed attention from institutional investors evaluating undervalued smart contract platforms.
Frequently Asked Questions (FAQs)
What are the key resistance levels for Cardano (ADA)?
The main resistance levels are the 200-day SMA at $0.78**, the **upper trendline of the bullish channel**, and the **$0.85 Fibonacci level. A breakout above these zones increases the probability of a move toward $1.
Can ADA reach $1 in 2025?
Yes, reaching $1 is possible if ADA maintains bullish momentum, breaks above $0.85, and benefits from continued market-wide optimism and short-covering activity.
What caused the recent ADA price surge?
The rally was driven by increased trading volume, rising buyer demand, and a $3.7 million short squeeze, which amplified upward price pressure.
What happens if ADA fails to break $0.78?
Failure to hold above $0.78 could lead to profit-taking and a retest of support at **$0.67 (50-day SMA). A break below this level might extend losses toward $0.51**.
How does the short squeeze impact future price action?
Short squeezes create self-reinforcing buying pressure. With nearly $6M in shorts still vulnerable, further rallies could trigger additional liquidations, accelerating gains.
Is Cardano undervalued compared to other smart contract platforms?
Many analysts believe ADA remains undervalued relative to peers like Solana and Ethereum, especially given its strong fundamentals, low transaction fees, and ongoing development upgrades.
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As Cardano approaches critical technical junctures, market participants must remain vigilant. The combination of strong volume, short squeeze dynamics, and a clear path toward $1 makes ADA one of the most watched altcoins in 2025. Whether you're a long-term holder or an active trader, understanding these key levels can help you make informed decisions in a rapidly evolving market.
By focusing on structural breakouts, risk management, and macro-level crypto trends, investors can position themselves to capitalize on what may be the beginning of Cardano’s next major bull run.