- A previously solid support level is now a major resistance level for ADA
- However, the market remains divided, with uncertainty being the main sentiment
Cardano (ADA), like many other cryptos, was not unaffected by the broader market downturn. In fact, at the time of writing, ADA was trading within the range of $0.3348, having fallen 1.8% in the past 24 hours.
Can ADA break above the USD 0.3449 resistance?
The ADA’s attempts to surpass the $0.3449 resistance – previously a support floor before collapsing on August 11 – have not been successful.
However, after three failed attempts, a bearish continuation flag (highlighted in black) has appeared on the charts, indicating the potential for greater selling pressure. This could push the price towards the $0.3184 support level.
Source: TradingView
Complete bearish dominance can be expected if the daily ADA candle closes below the lower limit of the bearish flag. Conversely, a close near the resistance at $0.3449 (or above) means bulls could gain control.
That’s not all, as AMBCrypto’s analysis of various on-chain metrics returned mixed signals. Which direction will ADA go next?
Retailers tend to sell
An overview of ADA’s daily active addresses at Santiment marked a significant decrease. From a peak of 36,657 on August 8, the count had dropped to the 10,000 zone at press time.
Source: Santiment
This decline in active addresses is a sign of declining retail participation, indicating growing bearish sentiment that could cause further declines in ADA’s price.
In addition, data from Mint glass 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, which could potentially lead to further sell-offs as large volumes of ADA are liquidated to cover these positions.
However, despite the current challenges in the market, AMBCrypto also found that long-term holders appear willing to bet on ADA’s recovery.
Optimism among long-term owners
According to Mint glassDaily Net Flow – which indicates the net amount of ADA in USD moving in and out of exchanges – recorded significant outflows from exchanges, totaling negative $1.75 million.
Source: Coinglass
Over the past week, net flows from major exchanges such as Binance, Coinbase, and Bitfinex have cumulatively reached negative $4.87 million, with Bitfinex alone responsible for net outflows of $1.77 million.
This predominantly negative net flow suggests that long-term holders have transferred their ADA to personal wallets for safekeeping. Such moves 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 gradually increased, further supporting the bullish outlook. Especially as more assets are deployed, loaned or allocated to DeFi initiatives.
While Cardano’s future trajectory remains uncertain, the development of new trading levels in the coming days will likely reveal whether the bulls or bears emerge first.