Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- $0.3035 resistance level could offer intense resistance to a retest.
- Declining OI along with a negative funding rate showed significant bearish sentiment.
Altcoins continued to suffer huge losses in the wake of regulatory issues surrounding major crypto tokens. Cardano [ADA] was not exempt; it registered a price drop of 38% between June 5 and June 10.
Read Cardanos [ADA] Price Forecast 2023-24
With Bitcoin [BTC] slowly climbing into the $26k price area, ADA posted an 11.6% gain to trade at $0.2744. While this provided a temporary reprieve for bulls, ADA’s long-term price movement signaled more bearish activity.
The bullish rebound may be short-lived if the bears hold sway
Source: ADA/USDT on trade view
ADA’s rally in March saw the price rise to a year-to-date high of $0.4622. However, the price rejected at that level and ADA dropped to the $0.3760 support level. The bullish defense of this key support level caused the price to hover above and below it between May 4 and June 4 before giving way to intense selling pressure.
This caused the ADA market structure to turn bearish on the daily time frame as the price broke the bullish lower high before falling to the December 2022 low of $0.2395. Still, strong buying pressure at the $0.2395 level led to a rapid rally for ADA.
Despite the rapid rally, chart indicators pointed to a continuation of bearish momentum. The Relative Strength Index (RSI) fell into the oversold zone on June 8 and the recent gains had no effect. This meant the intense selling pressure on ADA. The On-Balance Volume (OBV) also reflected the price decline with a 940.3 million drop in trading volume.
This could lead to sellers dragging ADA further down to $0.2000 or $0.1750, if bearish sentiment continues. On the other hand, a bullish BTC could attract buyers. However, bulls will have to overcome the obstacle at the $0.3035 resistance level before pushing for more leverage.
How much are 1,10,100 ADAs worth today?
Falling OI showed a lack of interest in a bullish reversal
Source: Coinalyse
Dates from Coin analysis on the four-hour time frame showed Open Interest (OI) falling despite the bullish rebound. This revealed market speculators’ disinterest in a bullish rally for ADA.
Similarly, Spot CVD continued its downturn to emphasize bearish dominance. Furthermore, the Funding Rate has been negative since June 10. This indicated that ADA’s bullish rebound could be short-lived as bears wait for a retest of the $0.3035 resistance level for more short opportunities.