- Cardano has a bullish market structure on the 12-hour chart.
- The lack of buying pressure suggested that a bearish reversal was likely in the coming days.
Cardano [ADA] increased by 19.16% from February 7 to 11. Since then, the bullish price action has stalled as buyers hit a thick pile of resistance. Despite a bullish Bitcoin [BTC]the purchasing volume behind ADA has not kept pace.
A recent AMBCrypto analysis piece shows that there is an estimated significant amount of liquidation levels in the region of $0.54-$0.56. Combined with price action factors, a bearish reversal seemed possible.
The confluence of the FVG and the order bloc
On the 12-hour chart, Cardano has a bullish market structure. This turnaround was achieved earlier this month when prices rose above $0.5205. However, the 12-hour bearish order block (red box) in the $0.56 region coincided with the presence of a fair value differential (white box) of $0.55.
Source: ADA/USDT on TradingView
The RSI moved above the neutral 50, agreeing with the bullish market structure. Momentum pointed to the upside, but the OBV was in a steady downtrend throughout 2024. This meant that even though the ADA defended the $0.45 support zone, buying pressure steadily decreased.
A move past USD 0.578 would be necessary to indicate that the bulls could take Cardano to USD 0.7. Until that scenario unfolds, traders could look to profit by shorting ADA, targeting the $0.48 support zone. Cardano investors can calculate their profits here.
Measuring short-term market sentiment
Source: Coinalyse
The Open Interest chart showed an upward trend from 7th to 11th, alongside prices. This showed that speculators were willing to go long. But that changed in the past 24 hours. On the other hand, the spot CVD chart was unable to establish an uptrend.
Similar to the OBV, spot buying activity was also muted on the lower time frames. The lack of demand meant a rejection from the $0.55 region was likely underway. A new foray into the $0.48 zone is likely.
Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.