Cardano (ADA) Faces Critical $0.3449 Resistance Level Amid Market Uncertainty

  • Cardano (ADA) has transformed a previous support level into a significant resistance barrier, reflecting wider market challenges.
  • Amidst the uncertainty within the market, selective data points highlight divergent investor activity.
  • “A daily ADA candle closing below the bearish flag’s lower boundary could signal full bearish dominance,” experts suggest.

Explore how current market sentiments and trading patterns are shaping Cardano’s future trajectory, offering insights into potential bullish or bearish outcomes.

ADA Faces Persistent Resistance at $0.3449

Cardano’s ADA has struggled to break above the $0.3449 resistance level, a former support that crumbled on 11 August. Currently hovering around $0.3348 following a 1.8% dip in the last 24 hours, the crypto asset finds itself under substantial selling pressure with a bearish continuation flag forming on the charts. This indicates a potential further decline to the key $0.3184 support level.

Market Sentiments and On-Chain Metrics

Analysis of on-chain metrics, primarily from Santiment, shows a significant drop in daily active addresses—a bearish indicator as they fell from a peak of 36,657 on 8 August to approximately 10,000. This reduced retail participation could lead to an extended decline in ADA’s price. According to Coinglass, liquidation data reveals that long positions have experienced considerable losses, contributing to the bearish sentiment.

Long-Term Holders Exhibit Optimism

Despite these short-term bearish signals, long-term holders appear confident in ADA’s potential recovery. Netflow data from Coinglass indicates substantial outflows, amounting to negative $1.75 million daily, highlighting the transfer of ADA from exchanges to personal wallets. Over the last week, this net outflow has totaled negative $4.87 million, reducing the supply on exchanges and signaling bullish long-term sentiment.

Cardano’s DeFi Ventures and TVL Growth

Adding to this optimistic outlook, DeFiLlama reports a gradual increase in Cardano’s Total Value Locked (TVL) within DeFi protocols. This growth is indicative of confidence in ADA’s use in staking, lending, and other DeFi initiatives. As more assets are committed to DeFi projects, this could further diminish the available supply of ADA on the market, potentially supporting a price rebound.

Conclusion

While Cardano’s immediate market prospects appear mired in uncertainty, the dynamics between retail traders’ bearish outlook and long-term holders’ bullish actions reveal a nuanced picture. The imminent trading days will be pivotal in determining whether bulls or bears will steer ADA’s course, making it crucial for investors to monitor these evolving patterns closely.

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Source: https://en.coinotag.com/cardano-ada-faces-critical-0-3449-resistance-level-amid-market-uncertainty/