Cardano (ADA) has seen its open interest drop sharply, hitting a nine-month low as bearish sentiment grows among traders. Since August 1, ADA’s open interest has fallen by 63%, currently sitting at $227 million, the lowest level since January. This sharp decline has raised questions about the future direction of the altcoin as futures traders adjust their positions.
Cardano Futures Traders Close Out Positions
Open interest refers to the total number of unsettled futures or options contracts in the market. A decline in open interest suggests traders are closing their positions, signaling reduced market activity. Cardano’s open interest, which is now at $227 million, last reached this level on January 13, according to data from Santiment.
Initially, when the decline in open interest began on August 1, traders maintained a bullish stance, demanding long positions. This was reflected in ADA’s positive funding rate between August 1 and August 30. However, as the altcoin’s price continued to decline, traders shifted strategies, moving toward short positions. So far in September, ADA’s funding rate has turned consistently negative, indicating strong bearish sentiment.
In perpetual futures contracts, a negative funding rate, currently at -0.013% for ADA, shows that more traders are betting on a price drop than a rise. This reflects the overall market view that ADA could continue to face downward pressure.
ADA Price Prediction: Traders Await Market Catalyst
As of now, ADA is trading at $0.33. Its relative strength index (RSI) has remained flat, indicating a balance between buying and selling pressure. This market indecision is further supported by ADA’s declining Average True Range (ATR), a measure of price volatility. A falling ATR suggests that price movements are shrinking, with fewer significant price swings in recent days.
Looking ahead, ADA traders are waiting for a key catalyst that could determine the coin’s next move. If bullish momentum returns, potentially driven by increased demand, ADA could see its price rise toward $0.39. However, if bearish pressure continues to mount, the altcoin could fall to its August 5 low of $0.27.
For now, the market remains cautious as traders navigate a period of uncertainty for Cardano.
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