ADA could slide below $0.30 as bears build momentum.
Key receivers
ADA is down 4% in the last 24 hours and is now trading below $0.37.
A bearish trend could see ADA break below the $0.30 psychological level.
Cardano shows more bearish activity on the chain
Cardano's ADA is down 4% in the last 24 hours, making it one of the best performing cryptocurrencies by market cap. Bearish performance comes amid weak data on the chain.
According to Cardano's Sentiment's Social Dominance scale, the current outlook for the cryptocurrency is poor. The index measures the share of ADA-related discussions on cryptocurrency media.
The measure has been steadily declining since mid-November, reaching an annual low of 0.032% on Thursday. This decline indicates weakening market demand and sentiment among Cardano investors.
As more traders move their coins from wallets to exchanges, ADA continues to face selling pressure as investors reduce their exposure to the market.
On the derivative side, data support a more pessimistic view of ADA. Coinglass OI-weighted funding rate data shows that the price of ADA will decrease as many traders expect a price drop in the near future.
The OI-weighted funding ratio turned negative on Thursday, down 0.0019%, suggesting shorts are paying off longs. If this metric is negative, ADA often faces heavy sales pressure.
ADA could retest $0.30 as bears dominate.
The ADA/USD 4-hour chart is weak and ineffective as Cardano has underperformed over the past few days. The coin faced an upper trend rejection of the falling wedge pattern on December 9 and has lost 22% of its value since then.
At the time of publication, ADA is trading at $0.36 and may go lower in the near future. If ADA continues its downtrend, the bears could push the price back to the October 10 low of $0.27.
The Relative Strength Index (RSI) on the 4-hour chart reads 31, approaching oversold territory, indicating strong bearish momentum. Additionally, the Moving Average Convergence Divergence (MACD) indicator showed a bearish crossover on Monday, further supporting the negative outlook.
If the bulls find their momentum, ADA could rally towards the 50-day EMA at $0.47 in the next few days.
