Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
- The $0.3-roadblock could become more challenging for market bulls
- Open Interest rates surged as sellers opened new contracts
Cardano’s [ADA] attempt to reclaim $0.3 could be more difficult in the coming days. The bearish pressure since mid-July was initially tamed at the $0.3-level in the second half of July. However, the level cracked in early August, opening up ADA for a further price slump.
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Meanwhile, Bitcoin [BTC] struggled to reclaim its $29.5k range-low. BTC has closed below the range-low for three consecutive days since Thursday (10 August). A weakening BTC could further complicate ADA recovery plans, especially if BTC’s weekly candlestick also closes below the range-low.
Double roadblock at $0.3
Source: ADA/USDT on TradingView
The $0.3-level is also a March low, besides being crucial resistance in June/July, before being flipped to support in late July and early August. While the level breach in early August didn’t push ADA into a downward spiral, a recent retest and price rejection formed a bearish order block (OB) on the daily chart ($0.296 – $0.302), red.
For perspective, order blocks (OB) are areas of large limit orders (sell or buy), left mainly by major or institutional players. ADA registered a negative price reaction in June and July at $0.3, and the bearish OB at the level could cement it as a bearish zone. So, bulls would find it challenging to climb above the roadblock in the coming days.
However, a breach of the immediate $0.290-support would make a retest of the early July range-low of $0.276 feasible.
On the price chart indicators side, the Chaikin Money Flow (CMF) wavered near zero, illustrating stagnant capital inflows. On the other hand, Relative Strength Index (RSI) retreated to the negative zone, underscoring the selling pressure over the past few days.
Open Interest rates surged
Source: Coinalyze
According to crypto-derivative data platform Coinalyze, ADA’s Open Interest (OI) rates surged amidst declining prices. The inference for the aforementioned divergence could be sellers’ increasing number of open contracts to cover the recent retracement – A bearish inclination.
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The CVD (Cumulative Volume Delta) headed south from 12 August, underscoring sellers’ control. This bearish bias could further cement the confluence of the $0.3-level and the daily bearish OB as a crucial hurdle for bulls to crack.
