Cardano (ADA) has seen a significant drop in the last 48 hours, effectively reversing all the gains made at the beginning of the week. According to the website 21milyon.com, the eighth largest token retreated by 6.4% from its monthly peak of $0.62 seen on February 20th. In the last 24 hours, the cryptocurrency has been almost stagnant, leading to a decrease in trading volumes.
Analyst Opinion on ADA’s Performance
According to data from the cryptocurrency analytics firm Santiment, there is a negative market sentiment towards the cryptocurrency, highlighting the reflections of the recent correction. Bearish statements were reinforced by popular technical analyst Ali Martinez, who noticed a sell signal on ADA‘s 3-day chart. Ali Martinez stated the following:
It’s important to note that the last two times this indicator signaled a decline, ADA experienced a price correction.
Is Selling Pressure Looming for ADA?
ADA faced a correction after its Relative Strength Index (RSI) reached the overbought level of 70. Since that period, buying pressure has significantly decreased. However, at the time of writing, the RSI was still above the neutral 50, so it may be too early to give a definitive sell signal for ADA. The Moving Average Convergence Divergence (MACD) line was about to make a bearish crossover with the signal line, which could indicate that selling time might be approaching.
ADA whales have used this pullback to increase their holdings. Data obtained from Santiment revealed an increase in addresses holding more than 1,000 tokens since February 2nd. Amidst all the bearish indicators, this situation has emerged as a strong statement in favor of ADA for the medium and long term. Nevertheless, short position analysts continue to dominate ADA in the futures market. According to their analysis of Coinglass data, the long/short ratio remained below 1 throughout February, indicating that expectations were higher for ADA’s decline rather than its rise.
