Cardano (ADA) Bull Run Slows, Bearish Reversal Looms
Cardano Rise to 0.56 Dollars: Why a Reversal is Likely
Despite a bullish Bitcoin, the buying volume behind Cardano (ADA) has not kept pace, suggesting that a reversal is likely.
Market Structure and Buying Pressure
Cardano shows a bullish market structure on the 12-hour chart. However, the lack of buying pressure suggests that a bearish reversal is likely in the coming days. Cardano rose by 19.16% between February 7th and 11th. Since then, however, the bullish price action has slowed down as buyers encountered a thick resistance area.
Resistance and Liquidation Levels
Despite a bullish Bitcoin, the buying volume behind ADA has not kept pace. A recent analysis by AMBCrypto found that the 0.54 to 0.56 dollar range is likely to have a significant amount of liquidation levels. Combined with factors from the price action, a bearish reversal seemed possible.
Confluence of FVG and Order Block
On the 12-hour chart, Cardano has a bullish market structure. This swing was achieved when prices rose above 0.5205 dollars earlier this month. However, the 12-hour bearish order block (red box) in the 0.56 dollar range coincided with the presence of a Fair Value Gap (white box) at 0.55 dollars.
RSI and OBV
The RSI moved above the neutral 50 and was in line with the bullish market structure. The momentum pointed upwards, but the OBV was consistently in a steady downtrend in 2024. This means that although ADA defended the 0.45 dollar support zone, buying pressure steadily decreased.
Market Sentiment in the Short Term
The Open Interest chart showed an upward trend from the 7th to the 11th, parallel to the prices. This showed that speculators were willing to go long. But that changed in the last 24 hours. On the other hand, the Spot CVD chart could not establish an upward trend. Like the OBV, spot buying activity on the lower timeframes was subdued. The lack of demand meant that a rejection from the 0.55 dollar range was likely underway.
A re-approach to the 0.48 dollar zone is likely. It is important to note that the information presented here does not constitute financial, investment-specific, trading, or other types of advice and solely reflects the author’s opinion.
Sources: AMBCrypto, Coinalyze, TradingView