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Catalin
Published On: Oct 30, 2024
2 min

Cardano Faces Neutral-Bearish Sentiment as Most Traders Are Shorting ADA

Cardano ADA) finds itself at a crossroads as mixed market sentiment and on-chain metrics indicate a cautious outlook. While ADA recently faced a substantial price decline, losing nearly 20% of its value, the cryptocurrency still shows potential for a 20% upside rally. 


With the U.S. presidential election approaching, market participants are weighing the prospects of a possible price rebound.


Technical Analysis: ADA’s Crucial Support and Bullish Potential

According to recent technical analysis, Cardano currently sits at a crucial support level of $0.340, a price zone that has previously triggered upward momentum. Historically, ADA’s visits to this level have led to buying pressure and subsequent rallies of over 20%, pushing prices to the $0.40 mark. 


Since July 2024, this pattern has been repeated many times, reinforcing the significance of this support zone.

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Traders and investors are closely monitoring ADA’s price movement, anticipating a similar upside rally. However, the timing and magnitude of this potential rise may depend on broader market conditions and investor sentiment, which remains somewhat bearish.


On-Chain Metrics: Bearish Sentiment and Liquidation Risks

Despite the technical bullish outlook, on-chain metrics tell a different story. Long/Short ratio for ADA reflects a neutral-bearish sentiment among traders. 


Additionally, ADA’s open interest (OI) continues to remain little, moving with low volumes in both buying and selling, suggesting potential sideways.

 

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Current Market Situation and Investor Participation

At the time of writing, ADA is trading around $0.36, with no significant price changes over the past few days. During this period, ADA’s trading volume has dropped by 50%, indicating reduced participation from traders and investors. 


This decline in trading activity suggests a wait-and-see approach as the market digests recent price movements and macroeconomic events.


Outlook: Will ADA Stage a Comeback?


While Cardano’s historical price action and technical analysis suggest the potential for a rebound, neutral-bearish sentiment and on-chain data indicate a challenging path ahead. With traders holding a larger percentage of neutral-short positions and open interest declining, ADA’s price trajectory remains uncertain.


If ADA manages to break through key resistance levels and overcome bearish pressure, a rally back to $0.40 is plausible. However, a sustained upside would likely require improved market sentiment and renewed buying interest.


As the U.S. presidential election draws near, the market’s overall mood and external factors will play a crucial role in shaping ADA’s future. Investors and traders should remain vigilant, balancing optimism with caution in a market marked by heightened volatility.

 

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Catalin

Catalin is the co-founder of Altrady. With a background in Marketing, Business Development & Software Development. With more than 15 years of experience working in Startups or large corporations. 

@cboruga
@cboruga