- Cardano has established a double-top pattern on the daily chart, indicating a potential bearish reversal.
- The increase in ADA spot inflows suggests that selling pressure may escalate, leading to lower prices.
Recently, Cardano [ADA]’s performance has lagged behind Bitcoin [BTC], with the altcoin showing a minor gain of 0.4% over the past week, currently trading at $0.347. Furthermore, ADA has exhibited signs of consolidation, fluctuating within a tight range of $0.339 to $0.35 over the past 24 hours.
Developments in ADA’s Bearish Pattern
The bearish trend surrounding ADA may continue as the daily chart reveals a double-top pattern. This formation often indicates a trend reversal, placing ADA in a vulnerable position for a downtrend unless positive sentiment emerges.
ADA bears have tested the neckline of this double-top formation at $0.339, aligning with the 100% Fibonacci level, before experiencing a price bounce. Should ADA breach this support level and decline further, it is likely to fall to $0.319.
(Source: Tradingview)
For ADA to negate this bearish formation and confirm an uptrend, it must rally past the $0.37 mark. However, the necessary buying support for such an increase appears to be absent.
The Relative Strength Index (RSI) is currently positioned at 46, indicating that sellers maintain control. Moreover, the RSI line is trending downwards, suggesting strengthening bearish momentum. The negative Chaikin Money Flow (CMF) further emphasizes a bearish outlook as selling pressure remains significant.
According to data from Coinglass, ADA traders are actively engaged in selling. Spot inflows have recently escalated to $4.28M, marking the highest level since mid-August. This trend indicates that traders are transferring their coins to exchanges with the intention of selling them.
Source: Coinglass
Insights from Derivatives Market
The derivatives market indicates that while sentiment remains positive, bearish signals still prevail. ADA’s open interest has risen to $238M at the time of writing, as reported by Coinglass. This represents the highest level this month, suggesting heightened interest in the altcoin.
ADA’s long/short ratio is at 1.07, indicating a slight majority of long traders over short traders. Notably, over 90% of open positions on Binance for Cardano are long, reflecting an overall market optimism.
Source: Coinglass
Read Cardano’s [ADA] Price Prediction 2024–2025
Despite this inclination toward long positions, traders speculating on ADA’s rise are still facing losses. In the past 24 hours, $441,000 worth of ADA longs have been liquidated, compared to only $16,750 in shorts.
However, increased whale activity could indicate a potential reversal in ADA’s price. Recent data shows that large ADA transactions have surged, suggesting whales may be in accumulation mode.
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