Cardano's price aims to increase by 62% after a 17% rise in the week.

Cardano (ADA) has just recorded an impressive bounce back, first breaking through the important resistance zone of $0.8838 after many months. The price has increased by 17% in just one week, indicating strong buying power. However, on-chain indicators show that market sentiment is becoming increasingly cautious, raising the question of whether this rally can be sustained to reach the target of $1.43.

Trend Reversal – Early Profit-Taking Signal?

A warning signal comes from the net money flow index on exchanges. After several weeks of continuous recording of ADA outflows from the exchange – which is usually a positive sign indicating that long-term investors are storing – on July 21, approximately 3.35 million USD ADA returned to the exchange.

Cardano's price and net inflow show positive changes – Source: CoinglassAlthough the number is not large, the fact that money returns to exchanges after a price increase often implies that selling pressure may soon appear.

The derivatives market heats up – adjustment risks?

Meanwhile, the derivatives market shows signs of overheating. The funding rate – the fee that perpetual contract traders have to pay to maintain their positions – surged to 0.024% on July 21, the second-highest level since April.

Cardano price and funding rates – Source: CoinglassThis reflects extreme bullish sentiment, with the majority of investors betting on the upward trend while using high leverage – a scenario that often leads to short-term corrections.

OBV Divergence – Is the Uptrend Losing Momentum?

The OBV indicator ( On-Balance Volume ) - tracking buying and selling pressure through trading volume - also sends concerning signals.

The balanced volume shows divergence – Source: TradingViewAlthough the price of ADA has surpassed the previous peak of $0.8641 and reached $0.88 on July 21, the current OBV is much lower than it was in May. This divergence between price and volume suggests that the upward momentum may be weakening.

Target $1.43 – needs more momentum from the overall market

On a technical level, breaking the $0.8838 mark opens up opportunities for ADA to approach important psychological levels such as $1.00 and $1.0828, before targeting $1.43 based on the Fibonacci extension level (2.618). However, to achieve a 61% increase from the current level, ADA needs to be supported by a positive trend from the entire cryptocurrency market.

Price fluctuations of Cardano – Source: TradingView One supporting factor comes from the classification report of Cardano as "mature" according to Clarity's rating system, placing ADA on par with Bitcoin and Ethereum – a significant advantage amid rising expectations for ETFs. On social media, analyst Dan Gambardello even presented a hypothetical scenario: if Bitcoin reaches $250,000 and ADA holds a 4.5% market share, the price of ADA could reach $12.86.

Mr. Giáo