The current sentiment in the crypto market appears to be a bit perplexing. In the midst of this uncertainty, Cardano [ADA] is showing signs of bullishness and may be gearing up for a significant upward movement in the near future.
In recent weeks, ADA has seen a decline of around 20% in its value, reaching a level where it has previously seen a remarkable surge.
The positive outlook for ADA can be attributed to recent price action as well as the upcoming US presidential election, which might have influenced market sentiment.
Evaluating ADA’s Technical Analysis and Critical Levels
As per CryptoCrypto’s technical analysis, ADA is currently hovering around a crucial support level of $0.315 and appears to be moving upwards. Historically, whenever ADA has touched this support level, it has encountered buying pressure, leading to a minimum 20% upsurge.
Since July 2024, ADA has tested this support level thrice, each time witnessing buying pressure and resulting in a price rally of over 20% to reach the $0.40 mark. Traders and investors are anticipating a similar bullish move in the coming days.
Nevertheless, despite the optimistic outlook, it might take some time for the expected rally to materialize. On-chain metrics for ADA reflect a bearish sentiment among traders. Coinglass, an on-chain analytics firm, reported that ADA’s Long/Short ratio was at 0.88, indicating a prevailing bearish sentiment.
Moreover, there has been a 1.2% decrease in ADA’s open interest over the past 24 hours, signifying possible liquidation of traders’ positions due to the heightened volatility in the crypto market.
Presently, 53.2% of leading traders have taken short positions, while 46.8% have opted for long positions.
Key Liquidation Thresholds to Watch
Notable liquidation levels are marked at $0.323 on the lower end and $0.338 on the upper end, with traders being heavily leveraged at these points, based on data from Coinglass.
If market sentiment remains unchanged and the price climbs to $0.338, short positions worth nearly $1.79 million could be liquidated.
Conversely, in case of a sentiment shift leading to a price drop to $0.323, long positions worth about $2.43 million might face liquidation. The combination of these on-chain metrics with technical analysis highlights a mixed sentiment among traders.
ADA is currently trading close to $0.33, showing no change over the past 24 hours. During this period, its trading volume has decreased by 62%, indicating reduced engagement from traders and investors compared to previous days.