Cardano ADA
Cardano (ADA) enjoyed a 12% price increase over the past month, but there are signs the rally could reverse as selling pressure builds. With the token currently priced at $0.39, market data suggests ADA could face a steep correction, sending it down by as much as 30% in the coming weeks.
Cardano ADA Long/Short Ratio Chart. Source: Coinglass
Data from Market Prophit reveals a split in investor sentiment. While the general sentiment remains moderately positive with a score of 0.18, more experienced âsmart moneyâ investors are bearish, scoring -1.34.
Shrinking Inflows and Active AddressesâA Bearish Signal?
As of Oct. October 2024, Cardano (ADA) is showing signs that market dynamics might be changing. Currently trading at $0.3847, ADA price has experienced a slight drop of 1.66% in the last day, even though it has gained 12% over the past month. With a market cap of around $13.45 billion, Cardano ranks as the 11th largest cryptocurrency by market capitalization.
LINK/USD 1-day price chart. Source: TradingView
The Chaikin Money Flow (CMF) indicator reveals a decrease in capital inflows, signaling that investors are taking profits. Although there is still some buying interest, weakening demand indicates that ADAâs rally may be slowing. Another concerning indicator for Cardano is the declining number of active addresses, suggesting the recent price rally may lack robust organic demand.
Moreover, the Ichimoku Cloud, a complex technical analysis tool, signals additional risks for ADA. The price of ADA, which currently sits at $0.39, is flirting dangerously close to falling below the Cloudâs support level.
If ADA breaks this support, it could plummet to as low as $0.27. Conversely, should the broader market conditions improve, thereâs a potential for ADA to rebound towards the $0.47 mark, providing a critical opportunity for recovery.
Bullish Reversal on the Horizon?
IntoTheBlockâs In/Out of the Money Around Price (IOMAP) further supports the bullish outlook. Nearly 133,350 addresses accumulated 1.25 billion ADA tokens at an average price of $0.376. These addresses bought the Cardano tokens for between $0.370 and $0.382, making it a key support zone.
ADA In/Out of the Money Around Price (IOMAP). Credit: IntoTheBlock
Moreover, Coinglassâs Cardano long-to-short ratio highlights the possibility of a bullish reversal. The ratio stands at 1.10, the highest level in over a month.
Cardano ADA Long/Short Ratio Chart. Source: Coinglass
Despite the positive on-chain metrics and technical indicators, a close below $0.342 would negate the bullish scenario, potentially triggering an 11% drop to retest the Sept. 6 low of $0.304.
The coming weeks are critical for ADA as it teeters between potential stabilization and a sharp correction, with investors keeping a keen eye on market conditions and emerging trends.
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