Cardano’s Buy Signal Sparks 0.98% Price Drop, Traders Eye Rebound

Cardano’s latest buy signal, generated by the TD Sequential indicator, has sparked interest among traders, suggesting a potential price rebound. At the time of the signal, Cardano was trading at $0.7100, down 0.98%. This technical signal comes after a period of consolidation following volatility, with the price attempting to break above the $0.8138-level and finding support around the $0.6973-level. If Cardano can maintain its position above this key support level, it may aim to test the next resistance around $0.8138, providing a glimmer of hope for traders looking for a price rebound.

The Binance funding rate for Cardano stood at -0.0084%, indicating that more traders are holding short positions and suggesting bearish sentiment in the market. However, the mild fluctuations in the rate suggest a relatively balanced market with no extreme sentiment driving the price in either direction. This negative funding rate could lead to downward pressure if short positions continue to dominate.

Cardano’s daily active addresses saw a noticeable uptick, climbing to 23,009 addresses, and transaction volume surged to 123.24 million ADA, signaling growing interest in the asset. This increase in activity could indicate that more investors are participating in the market, potentially supporting a short-term price surge. However, despite the growth in addresses and transactions, the market has been uncertain, suggesting that the ongoing trend may not be sustainable for the long term.

Cardano’s MVRV ratio stood at 11.75%, indicating that the asset was somewhat overvalued in the short term. This ratio measures the difference between Cardano’s market value and its realized value, suggesting potential profit-taking pressure. While the MVRV ratio hinted that ADA could face some resistance at higher price levels, it also pointed to a potential long-term bullish trend. Despite short-term overvaluation, Cardano may still see growth potential in the future.

The latest buy signal and the increase in market activity for Cardano hinted at a potential short-term rally. However, the negative funding rate and high MVRV ratio pointed to caution among traders. Based on prevailing market conditions, Cardano may see a temporary price bounce. However, the rally might not be sustainable in the long run. Therefore, Cardano’s price may see some upward movement, but it is unlikely to trigger a lasting bull run at this time.