Cardano (ADA), breaks out of the falling wedge and maintains its technical edge… Geopolitical tensions serve as a 'supporting' factor.

Currently, ADA is trading at $0.27, up 4.73% over the past 24 hours. After breaking out upward from a recent falling wedge pattern, technical bullish signals continue, but geopolitical tensions in Latin America could potentially limit further gains, highlighting a short-term caution point.

Derivative Market Signals: Surge in Open Interest and Long-Position Dominance

According to CoinGlass data, open interest (OI) in Cardano futures has recently increased significantly, reaching monthly highs. An increase in OI indicates not just heightened trading activity but also the inflow of new capital into the market, suggesting that the current rebound rally is supported by tangible capital flows.

The long-to-short position ratio is also notable. Long positions, near a monthly high of 1.06, are outnumbering short positions, reflecting a bullish sentiment among market participants. These derivative market signals imply that the technical breakout is not just a one-off move but is backed by genuine demand.

Technical Watchpoints: Breakthrough of $0.42 Resistance Opens Up Further Upside

Looking at the price structure, ADA recently broke above the upper trendline of a falling wedge pattern formed by connecting highs and lows since mid-October. This breakout is interpreted as a sign of the end of a bearish cycle and supports the current upward momentum.

Key future points at the current price level ($0.27):

Upside Scenario If bullish momentum continues, the first resistance is around the 50-day moving average near $0.42. Closing above this level on the daily chart could open the door to the next target of $0.49, with additional upside potential. The ongoing increase in OI and dominance of long positions make reaching these technical targets a plausible scenario.

Momentum Confirmation Technical indicators also point to bullish strength. The Relative Strength Index (RSI) is at 55, above the neutral line, indicating rising momentum. The Moving Average Convergence Divergence (MACD) shows a golden cross with expanding green histogram bars, signaling strengthening technical momentum beyond just price increases.

Downside Risks In case of a deep correction, the recent low around $0.32 serves as a short-term support level, representing a retracement zone.

External Factors: Geopolitical Tensions Could Limit Momentum

While technical and derivative indicators are bullish, external shocks could rapidly change market sentiment. Of particular concern are geopolitical risks in Latin America.

Recent reports of military actions related to Venezuela, along with statements concerning Colombia, have increased regional uncertainty. Additionally, macro risks such as stalled Russia-Ukraine negotiations, instability in Iran, and issues in Palestine compound the environment, elevating the geopolitical risk premium in the market.

In this context, a stronger dollar preference and pressure on risk assets, including altcoins, could emerge. As a result, the current technical breakout and bullish signals might not unfold as expected, or the rally could fall short of technical targets.

Conclusion: The breakout from the falling wedge pattern in ADA is a clear technical bullish signal, supported by derivative market data. However, given the current geopolitical tensions, there is a risk that external factors could hinder the rebound. Investors should monitor macro developments closely alongside technical progress.