Connect with us
Active Currencies 13541
Market Cap $2,778,308,082,855.90
Bitcoin Share 49.78%
24h Market Cap Change $-0.21

Cardano: Here’s how traders are ‘dealing’ with ADA after a bear trap

2min Read
Cardano: Here's how traders are 'dealing' with ADA after a bear trap

Share this article

  • Participants in the derivatives market remain long on ADA.
  • The token price decreased as the short-term outlook calls for consolidation.

As Cardano [ADA] looks to end its overall monthly performance on a positive note, traders remain enthusiastic about the token. Well, the reason for this perception is not one that needs a lot of convincing.

For a token that wrestles with notable upticks, ADA had its bizarre moment in March, outperforming top-ranking cryptocurrencies including Bitcoin [BTC].


Read Cardano’s [ADA] Price Prediction 2023-2024


This uptrend helped the Market Value to Realized Value Ratio (MVRV) ratio to exit the negative region where it resided at the beginning of the month. The MVRV ratio shows the relationship between the current price of an asset and the value at which it was acquired.

Gains and the quest for more

At press time, the metric was 6.017% according to Santiment. This indicates that the average token acquired when March began up until the time of writing was in profit. Consequently, this price action seems to have also driven traders’ resolve.

Cardano [ADA] funding rate and MVRV ratio

Source: Santiment

As shown above, the ADA funding rate was 0.01%. And a look at the data revealed that it had remained like that for quite a while. The funding rate acts as the force that drives perpetual contract prices to converge with the price of the underlying asset.

Now, since the token’s funding rate was positive, it implied that long-position traders were dominant, and were willing to pay short traders. Hence, indicating bullish sentiment.

Furthermore, it was not just a case of open long positions. But the Open Interest (OI) centered around ADA was extremely high. At the time of writing, the OI on several exchanges was all in green.

This suggests that there was massive strength behind the ADA price trend. And also, a lot of market participants had an ADA open contract.

Cardano [ADA] Open Interest

Source: Coinglass

ADA’s sideway trend could be next

On the technical side, ADA seemed to have maintained a solid buying momentum, based on the Relative Strength Index (RSI).

At press time, the indicator’s value was 58.04. Such a position exudes favor for the bulls. Except it hits an RSI value of 70, the ADA price shouldn’t succumb to bearish demands.


Is your portfolio green? Check the Cardano Profit Calculator


However, it was unclear how long ADA could sustain the current momentum as indicated by the Exponential Moving Average (EMA). Based on the daily chart, the 20 EMA (blue) and 50 EMA (yellow) were situated at almost the same spot. This suggested consolidation in the short term and a possible end to the ADA uptick.

ADA price action

Source: TradingView

However, at press time, ADA had already established a downside to its price at $0.378. This triggered its 30-day performance to end with a 5.47% hike.

Share

Victor is a full-time journalist at AMBCrypto. Before his sojourn into the world of journalism, he was a “buy the top, sell the bottom” merchant while doubling as a sales funnel copywriter. Victor’s focus is the exciting on-chain landscape of the cryptocurrency market and its underlying technology. His other interests include politics, Afrobeats, sports, and marketing.
Read the best crypto stories of the day in less than 5 minutes
Subscribe to get it daily in your inbox.
Please check the format of your first name and/or email address.

Thank you for subscribing to Unhashed.