- Cardano’s latest buy signal hinted at potential for a short-term rally, but uncertainty remains
- Despite hike in market activity, the funding rate and MVRV ratio highlighted caution
The TD Sequential indicator is in the news today after it recently generated a buy signal for Cardano [ADA], with the altcoin trading at $0.7100, down 0.98%, at press time. This technical signal has sparked interest among traders, hinting at the potential for a price rebound.
As the market watches closely, the question remains – Could this be the start of a short-term rally, or will it turn out to be just another fleeting spike?
Examining Cardano’s recent price action, we can see clear consolidation after a period of volatility. In fact, the price registered an attempt to break above the $0.8138-level, with support forming around the $0.6973-level.
If ADA can hold above this key support level, it may aim to test the next resistance around $0.8138. To put it simply, the TD Sequential buy signal provided a glimmer of hope for traders looking for a price rebound.
Source: TradingView
Binance funding rates analysis – Is sentiment bullish or bearish?
At the time of writing, the Binance funding rate for Cardano had a value of -0.0084%. This negative rate suggested that more traders are holding short positions – A sign of bearish sentiment in the market.
However, the rate’s mild fluctuations alluded that the market remains relatively balanced, with no extreme sentiment driving the price in either direction.
Additionally, this negative funding rate could lead to downward pressure if short positions continue to dominate.
Source: Santiment
Daily active addresses and transaction volume analysis
Cardano’s daily active addresses saw a noticeable uptick recently, climbing to 23,009 addresses. Additionally, transaction volume surged to 123.24 million ADA, signaling growing interest in the asset.
This hike in activity could indicate that more investors are participating in the market, potentially supporting a short-term price surge.
However, despite the growth in addresses and transactions, the market has been iffy. This could be a sign that the ongoing trend may not be sustainable for the long term.
Source: Santiment
ADA MVRV ratio – Overvalued or undervalued?
Cardano’s MVRV ratio stood at 11.75% – A sign that the asset was somewhat overvalued in the short term. This ratio measures the difference between Cardano’s market value and its realized value, indicating potential profit-taking pressure.
While the MVRV ratio hinted that ADA could face some resistance at higher price levels, it also pointed to a potential long-term bullish trend.
To put it simply, despite short-term overvaluation, Cardano may still see growth potential in the future.
Source: Santiment
Will Cardano’s rebound hold or fade away?
The latest buy signal and hike in market activity for Cardano hinted at a potential short-term rally. However, the negative funding rate and high MVRV ratio pointed to caution among traders.
Based on prevailing market conditions, Cardano may see a temporary price bounce. However, the rally might not be sustainable in the long run. Therefore, Cardano’s price may see some upward movement, but it is unlikely to trigger a lasting bull run at this time.
