Cardano (ADA) has faced challenges maintaining the $1 support level, resulting in a significant 9% drop in the past 24 hours. Despite this setback, traders remain optimistic.
Currently trading at $0.80, ADA's recent price movement has inspired hope for a potential recovery.
Enthusiasts of Cardano are expressing confidence in a rebound. The funding rate for Cardano is on the brink of transitioning from negative to positive, indicating a shift in trader sentiment.
When the funding rate is negative, bearish sentiment prevails as short sellers dominate. However, a move towards positive territory signals a growing confidence among traders in a price resurgence.
The recent decline in ADA's price to $0.80 has allowed traders to enter the market at lower levels, anticipating an uptrend and foreseeing a potential recovery for the cryptocurrency.
One significant indicator supporting the optimism for Cardano's recovery is the Market Value to Realized Value (MVRV) Long/Short Difference, currently standing at 23%. This metric evaluates the profitability of long-term holders compared to short-term traders.
A positive MVRV value implies that long-term holders are seeing profits, contributing to market stability.
Long-term holders play a crucial role in supporting the asset, and their profitability helps maintain the overall market health. As these investors witness their positions becoming profitable, they are less inclined to sell, consequently easing downward pressure on ADA's price.
Despite ADA's recent drop by 16.8% and struggles to surpass the $0.99 resistance level, the cryptocurrency has held support above $0.77, indicating a potential rebound opportunity. Optimistically, if the funding rate shifts positively and the overall market momentum remains strong, ADA could regain the $0.85 support level.
A successful shift could pave the way for Cardano to retest $0.99 and potentially establish a new support level at $1.00.
However, there are risks involved. If market conditions deteriorate, ADA might lose support above $0.77, jeopardizing the bullish outlook and potentially leading to a further decline towards $0.70.