Cardano Down 50% In 4 Months: Sellers Unrelenting, Best Time To Buy ADA?
2024年7月26日 - 5:00AM
NEWSBTC
Cardano has been under pressure and selling off in the past four
months. From the ADAUSDT daily chart, it is evident that bears have
been in control. After peaking in March, prices plunged by as much
as 60% before finding support in mid-July. Since then, ADA has
recovered slightly, but bears have not relentred, especially this
week. So far, ADA is still 50% after the spike in March. This set
of conditions could explain traders’ bearish stance on multiple
perpetual trading platforms like Binance and OKX. The slip in ADA
prices and the alignment of the trend to be bearish from March
explain why the funding rate is negative and continues to increase.
Time To Buy ADA Despite Extremely High Negative Funding Rates? Even
so, not everyone is extremely bearish. Santiment analysts note that
despite this state of affairs, ADA prices could, if anything,
recover unexpectedly. They explained that the recent spike in
negative funding rates, pointing to heightened selling activity,
could offer a contrarian opportunity for aggressive traders.
Related Reading: End Of The Road? Shiba Inu’s Shibarium Sees
Massive 80.3% Crash In Active Accounts Historically, Santiment
analysts explained that prices tend to recover sharply in the
sessions ahead whenever an asset is extremely sold, as is the case
with ADA. Rapidly expanding prices tend to trigger a short squeeze,
forcing sellers to buy at a higher price and fanning the uptrend.
Nonetheless, this is not always the case, and this contrarian
strategy should be taken cautiously. When a given asset is
perceived as “extremely oversold,” prices can often dip even as
analysts expect a recovery. This may mean traders are unconvinced
that the asset has what it takes to recover in the wave of intense
selling pressure. In this case, traders have to stay safe and align
with the primary trend—bearish. Cardano Whales Staying Away Ahead
Of The Chang Hard Fork So far, parallel data from IntoTheBlock
points to waning investor confidence. According to data, there has
been a drop in whale inflow, a dent to the expected optimism.
Still, this can be attributed to portfolio rebalancing that might
impact inflows, among other factors. It remains to be seen how ADA
will perform in the coming days. The Cardano development team is
preparing for the Chang hard fork, which is set to conclude by the
end of July. Related Reading: Could Bitcoin Soar To $100,000 With
Trump Back In The White House? This upgrade will decentralize the
smart contracts platform by introducing elected delegate
representatives tasked with shaping the Cardano constitution. The
successful implementation of Chang will usher in the final
development phase of Cardano, Voltaire. In turn, this effectively
decentralized the network, similar to Ethereum. Feature image from
iStock, chart from TradingView
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