Cardano (ADA) stands before a bounce back opportunity as market sentiment turns positive.

The price of ADA is showing clear signs of a bounce back as it finds a solid support point around an important support zone during Monday's trading session, following a nearly 13% fall last week. Positive signals are coming from the derivatives market, with ADA's funding rate turning positive and buying positions increasing significantly – indicating that confidence is returning among the investor community. Notably, Cardano's active participation in dialogues with the Financial Conduct Authority of the United Kingdom (FCA) further reinforces the project's commitment to contributing to the establishment of a fair and sustainable legal framework for the digital asset market.

The derivatives market shows signs of bounce back

Data from the derivatives market of Cardano shows a clear signal leaning towards the bulls. According to the funding rate index provided by CoinGlass, the number of traders expecting the price of ADA to rise is currently outpacing those betting on a downward trend.

The index switched to the positive zone on Sunday and continued to reach 0.0053% on Monday, reflecting that buyers (Long) must pay fees to sellers (Short). According to past observations, whenever the funding rate reverses from negative to positive, the price of ADA usually begins impressive recovery phases.

The funding rate chart of Cardano | Source: CoinglassNot only that, the long/short ratio of ADA is also reaching 1.13 – the highest level in over a month. This figure indicates that the majority of traders are currently placing their trust in the scenario of ADA's price continuing to rise.

Long/Short ADA Ratio Chart | Source: Coinglass## Cardano Fund partners with IOTA and INATBA in efforts to adjust regulations in the United Kingdom

According to the latest report from IOTA last week, the IOTA Foundation has collaborated with INATBA and the Cardano Foundation to submit a proposal to the Financial Conduct Authority of the United Kingdom (FCA), requesting this agency to reconsider its current approach to cryptocurrency regulation. This coalition criticized the "one-size-fits-all" model that the FCA is applying, while emphasizing the need to clearly distinguish between centralized custody services and non-custodial decentralized protocols.

"Most of the losses that consumers suffer in the cryptocurrency field do not stem from DeFi, but primarily from centralized custodial organizations with opaque operations — entities that traditional regulatory frameworks can effectively oversee. Meanwhile, DeFi operates on open-source, transparent, and auditable code," the report emphasizes.

The alliance also calls for the establishment of a self-regulatory mechanism led by the industry for the DeFi sector. At the same time, they urge the UK government to seize the opportunity to make the country a global model in creating smart, open cryptocurrency policies that promote innovation.

Price Prediction for Cardano: ADA bounces back after hitting key support level

On July 28, the price of Cardano (ADA) was unable to break through the daily resistance level at $0.84, resulting in a significant fall of 16.17% for the week. However, the downward momentum halted as ADA bounced back from the important support zone at $0.70 on Sunday – coinciding with the 200-day exponential moving average (EMA). This coincidence has turned the area around $0.70 into a notable reversal point on the technical chart.

As of Monday morning, ADA is continuing its recovery journey and trading at the $0.73 level. If it maintains its current momentum, this altcoin is entirely capable of challenging the resistance zone of $0.84 in the near future.

ADA/USDT daily chart | Source: TradingViewOn the daily chart, the relative strength index (RSI) is at 47 and is gradually moving towards the neutral threshold of 50 – a signal indicating that the bounce back momentum still exists, but is losing some strength. The RSI breaking above 50 will be a necessary condition to strengthen the rise to the sky.

On the contrary, if profit-taking pressure returns, ADA may face a correction, pulling the price back to the support zone around the $0.70 mark.

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