Gauging Cardano’s short-term potential amid the current bear run
Bears have been putting pressure on Cardano (ADA) in recent months, causing the crypto fear and greed index to dip into the ‘fear’ zone. Despite the altcoin’s Funding Rates taking a hit, the long/short ratio still offers hope for the bulls.
Cardano has been on a long-term downtrend, with bearish patterns on its daily chart. The recent break in patterns and overall market uncertainties have only accelerated the bearish pressure. However, a potential reversal from the support level around $0.37 could spark some bullish momentum and push the price above the daily EMAs.
Currently, ADA is trading near the $0.37 region, down approximately 2% in the last 24 hours. The altcoin has been struggling to break above its 50-day EMA for nearly three months. The bearish crossover of the 20-day EMA and the 50-day EMA has set the stage for an extended downtrend.
The recent decline below the $0.42 resistance level confirmed the symmetrical triangle breakout, leading to a 15% drop in value in less than three weeks. A close above the immediate support level could help ADA recover its losses, with resistance likely at the 20-day and 50-day EMAs.
The Relative Strength Index (RSI) is nearing oversold levels, suggesting a potential reversal in selling pressure. The MACD and Signal lines have been bearish for over three months, but a bullish crossover could temporarily halt the downward trend.
Despite market uncertainty, ADA’s long/short ratio on Binance stands at 3.7, indicating more long positions than short positions. This could signal a potential reversal from the immediate support level. However, ADA’s 90% 30-day correlation with Bitcoin means monitoring BTC’s movements is crucial for assessing ADA’s near-term potential.