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- ADA’s Long/Short ratio stood at 0.93, indicating bearish sentiment among traders.
- A prominent crypto expert believes that ADA could face a near-term price correction.
Amid an ongoing price correction in the cryptocurrency market, Cardano [ADA] seemed poised for a significant price drop as the daily chart formed a bearish pattern.
In addition to ADA, also other major cryptocurrencies, including Bitcoin [BTC]Ethereum [ETH]and Solana [SOL] also experience price corrections.
Cardano key levels
According to AMBCrypto’s technical analysis, ADA appeared bearish as it formed a bearish pin-bar candle, which touched the downtrend line resistance at the time of writing.
The formation of such a candlestick pattern on the daily chart is considered a bearish signal, which traders and investors take into account when building short positions.
Source: TradingView
Since April 2024, ADA has reached this resistance level several times, and each time it has faced selling pressure. This time, however, the crypto community expects similar selling pressure and price decline.
Based on the recent price action, if ADA closes a daily candle below the $0.3912 level, there is a strong possibility that it could fall by 20% to reach the $0.31 level in the coming days.
However, this bearish thesis will only hold as long as ADA trades below the $0.42 level. If the price exceeds this level, the bearish outlook may fail.
ADA is bearish, on-chain
This negative sentiment for ADA was further supported by on-chain metrics. According to on-chain analytics firm Coinglass, ADA’s Long/Short Ratio stood at 0.93 at the time of writing, indicating bearish sentiment among traders.
Furthermore, the Futures Open Interest has remained unchanged over the past 24 hours, reflecting neutral interest from traders.
Source: Coinglass
At the time of writing, 51.63% of top traders had short positions, while 48.37% had long positions.
Read Cardanos [ADA] Price forecast 2024–2025
When all this data is combined, it appears that bears are currently dominating the asset, which could lead to a significant price drop in the coming days.
At the time of writing, ADA was trading around $0.385, having fallen 1.4% in the past 24 hours. Trading volume fell 35%, indicating lower trader participation amid bearish market sentiment.