Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- The H4 market structure was flipped to favor sellers.
- A bullish block in the south could see a reversal.
Cardano [ADA] was unable to maintain the gains made in the second half of last week. On February 15, the price rose from $0.383 to $0.418. At the time of writing, the price of the asset has fallen below the $0.389 level.
Realistic or not, here is ADA’s buy cap in BTC terms
Increasing regulatory pressure in the US recently has also been a factor in shifting sentiment towards fear. However, it was possible that ADA may recover and push higher after a retest to a critical support zone.
The dip below $0.389 showed that the bears had the upper hand
Source: ADA/USDT on TradingView
When ADA was trading above the $0.4 level a few days ago, the market structure on the four-hour chart was bullish. The strong rally above $0.37 on February 14 meant that the previous bearish structure had been broken. A higher low was then set at $0.389.
Last week, the $0.383-$0.39 area served as support. At the time of writing, Cardano was trading at $0.384 and was likely to go lower.
The Directional Movement Indicator showed that the -DI value was above 20 and the ADX was also on the verge of crossing above 20. If this happened, it would be an indication of a strong downtrend.
The CMF was in neutral territory and a reading of +0.01 at press time did not indicate pressure from buyers.
How much is 1,10,100 ADA worth today?
However, the bulls can still hold out hope. The move above $0.37 meant that the H4 bullish order block at $0.35 was likely to be a strong demand zone. A fresh visit to this area will likely see ADA make another attempt to break above $0.42.
Therefore, the $0.35-$0.36 range is where short sellers from $0.39 can look for profit. At the same time, within this zone, the bulls could present a buying opportunity.
The funding rate decreased but remained positive as the Open Rate was also on the decline
Source: Coinalyze
Coinalyze’s data agrees with the bearish signals shown on the price charts. The one-hour chart showed open interest falling in tandem with the price. This meant that long positions were discouraged but also that the majority of the market had not yet shorted ADA. The positive funding rate also supported this conclusion.
Spot CVD has been in decline for the past two days, to highlight mounting selling pressure.