Cardano The Reasons Why the Purchasing Momentum of ADA Might Inevitably Lead to a Sharp Decline

Bijie.com report:
Although ADA has been trading within a bullish symmetrical channel, the momentum for a breakout is increasing, but a large supply is looming.
On-chain indicators suggest that if the momentum continues to strengthen, ADA may surpass this level.
Cardano [ADA]
In the past week and month, the Chinese stock market has experienced stagnation, with gains of 3.65% and 3.69% respectively. However, a shift may be occurring as ADA has risen by 4.94% in the past 24 hours.
The key question now is: how long can this rebound last? ADA is approaching a key supply zone that could determine its next direction.
Up or down? What do the technical charts indicate?
ADA has now entered the supply zone on the chart, which is a critical level where significant selling pressure could trigger a price drop.
The price range for this supply zone is between $0.3680 and $0.3823, and ADA must break through this range to reach the target of $0.4158.
If ADA fails to break through this level, the downward momentum could push the price to $0.3566, which could become a potential support for a rebound.
Currently, AMBCrypto finds that traders are still predominantly bullish, and ADA may attempt to break through the supply zone.
Bullish fundamentals for an uptrend
Key indicators of ADA’s bullish momentum, such as open interest and funding rates, have increased significantly, indicating a potential price rise.
At the time of writing, the open interest (OI) has risen by 6.49% to $252.62 million. This growth indicates sustained bullish momentum historically associated with price uptrends.
OI represents the number of unsettled derivative contracts on an asset, reflecting market sentiment. The percentage growth of ADA is a bullish signal.
Furthermore, according to ADA’s data, the funding rate, which measures regular payments between perpetual futures traders, is currently at 0.0132%.
Coinglass
This further strengthens the bullish prospects for the asset.
Expectations of a market decline for ADA
Based on the relative strength index (RSI), ADA may face a decline in the upcoming trading period.
The RSI is currently at 67.36, approaching the overbought zone above 70. If ADA surpasses this threshold, the price may decline.
If this scenario occurs, we may see a decline in the current supply zone, pushing ADA towards lower support levels.