Cardano (ADA), a Layer-1 (L1) cryptocurrency, has recently experienced a 10% increase in value over the past week, hinting at a possible continued upward trend. The coin is currently trading near its 20-day Exponential Moving Average (EMA), which is a significant technical level that, if surpassed, could confirm the ongoing rally and potentially lead to new highs.

ADA is on the verge of surpassing its 20-day EMA, a moving average that emphasizes recent prices over a 20-day trading period. Crossing above the 20-day EMA typically signifies a shift from bearish to bullish momentum in the short term, indicating growing buying pressure for ADA and confirming an upward trend.

Breaking above the 20-day EMA would not only demonstrate renewed momentum for ADA but also establish it as a dynamic support level for the coin's price, granting buyers more influence. On-chain metrics, such as ADA's Network Realized Profit/Loss (NPL) turning negative, imply that most ADA holders are currently in a loss position. This tends to discourage selling pressure as traders are less likely to sell their assets at a loss, potentially leading to longer holding periods, limited supply, and short-term price increases.

Analyzing ADA's performance against the US dollar on the one-day chart, a positive Chaikin Money Flow (CMF) indicator at 0.04 further supports the bullish stance. A positive CMF suggests that buying pressure exceeds selling pressure, with substantial capital flowing into ADA and investors accumulating rather than selling off their positions. If this trend persists, ADA could potentially reach $0.70 in its price rally. However, in case of profit-taking, ADA risks reversing its upward momentum and falling to $0.55.