ADA drops to a familiar support level — can sellers inflict a breakout?

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

• ADA registered a 7% dip, dropping it to the key $0.239 support level.
• Buyers were overwhelmed in the futures market, leading to 97.62% long liquidations.

Cardano [ADA] extended its bearish structure on the higher timeframes with a retest of the $0.239 support level.

Read Cardano’s [ADA] Price Prediction 2023-24

AMBCrypto’s analysis of ADA dated 10 October highlighted the bullish struggle to keep the price above $0.25, offering a shorting opportunity for sellers. This analysis was validated with sellers taking advantage to register a 7% price dip, as bulls failed to make progress past the $0.25 price hurdle.

Could the recent price dump trigger a break of support level?

Source: ADA/USDT on Trading View

The $0.239 support level has been key for buyers over several months. ADA’s last major rally came from this support level in mid-June. Despite the heavy selling pressure after hitting the $0.376 resistance, the $0.239 price level has withstood multiple bearish attempts to flip the level.

However, the recent price action along with on-chart indicators suggested a break of the support level might be imminent.

The Relative Strength Index (RSI) highlighted the selling pressure with a reading of 34, as it edged toward the oversold zone. Likewise, the On Balance Volume (OBV) continued to trend lower.

The bearish market structure along with the indicators hinted strongly that ADA traders could expect further price dips. Thus, a break below the support level would crush the bullish defense of the support level and extend the dominance of sellers.

Buyers lose leverage in the futures market

Source: Coinglass

The liquidation data highlighted buyers running out of leverage. According to Coinglass, 97.62% of the liquidations over the past day were long positions. This amounted to $429.37k worth of wrecked buy trades.

How much are 1,10, or 100 ADA worth today?

As such, shorts gained a crucial advantage on the exchange long/short ratio. As of press time, sellers held a 51.34% share of the open contracts on the daily timeframe. Thus, the short-term bias for ADA remained fully bearish with a break of the $0.239 support looking likely over the coming days.

Source: Coinglass