- A previously solid support level is now a major resistance level for ADA
- Market remains divided though, with uncertainty being the primary sentiment
Cardano (ADA), like many other cryptos, wasn’t unaffected by the wider market’s downturn. In fact, at the time of writing, ADA was trading within the margin of $0.3348, following a 1.8% decline in the last 24 hours.
Can ADA break above the $0.3449 resistance?
ADA’s attempts to surpass the $0.3449 resistance—previously a support floor before collapsing on 11 August —have been unsuccessful.
However, after three failed attempts, a bearish continuation flag (marked in black) has emerged on the charts, indicating the potential for greater selling pressure. This could push the price down towards the $0.3184 support level.
Source: TradingView
Full bearish dominance can be anticipated if the daily ADA candle closes below the bearish flag’s lower boundary. Conversely, a close near the $0.3449 resistance—or above it— means that bulls could gain control.
That’s not all though as AMBCrypto’s analysis of various on-chain metrics yielded some mixed signals. Which way will ADA go now?
Retail traders lean towards selling
A review of ADA’s daily active addresses on Santiment highlighted a significant decline. From a peak of 36,657 on 8 August, the count had sloped down to the 10,000-zone at press time.
Source: Santiment
This fall in active addresses is a sign of dwindling retail participation, signaling growing bearish sentiment that could cause further more declines in ADA’s price.
Additionally, data from Coinglass revealed that of the $649.1k liquidated in the last 24 hours, long position holders suffered the most, with losses totaling $549.81k.
This forced closure of long positions underlines a bearish market mood, potentially leading to further sell-offs as large volumes of ADA are liquidated to cover these positions.
Despite the market’s current challenges, however, AMBCrypto also found that long-term holders appear willing to bet on ADA’s recovery.
Optimism among long-term holders
According to Coinglass, the daily netflow—indicating the net amount of ADA in USD moving in and out of exchanges— registered a substantial outflow from exchanges, totaling negative $1.75 million.
Source: Coinglass
Over the past week, the netflow from major exchanges such as Binance, Coinbase, and Bitfinex has cumulatively reached negative $4.87 million, with Bitfinex alone accounting for a net outflow of $1.77 million.
This predominantly negative netflow suggests that long-term holders transferred their ADA to personal wallets for safekeeping. Such movements are typically seen as bullish, reducing the available supply of ADA on exchanges.
Finally, DeFillama reported that ADA’s Total Value Locked (TVL) in DeFi protocols has been gradually rising, further supporting a bullish outlook. Especially as more assets are staked, lent, or committed to DeFi initiatives.
While the future trajectory of Cardano remains uncertain, the unfolding of new trading levels in the coming days will likely reveal whether bulls or bears are coming out first.