- ADA has recovered 6.4% from its monthly peak of $0.62.
- The number of whale addresses increased after the correction.
Cardano [ADA] fell substantially over the last two trading days, effectively wiping out any gains made earlier in the week.
The eighth largest asset has recovered 6.4% from its monthly peak of $0.62 on February 20, according to CoinMarketCap. In the past 24 hours, the coin barely moved, which also led to a drop in trading volumes.
AMBCrypto’s analysis of Santiment data showed negative market sentiment for the coin at the time of writing, underscoring the impact of the recent correction.
Source: Santiment
Tough days ahead for ADA?
The bearish narrative was reinforced by popular technical analyst Ali Martinez, who spotted a sell signal on ADA’s 3-day chart. “It is important to note that the last two times this indicator has indicated bearish, ADA experienced a price correction,” Martinez warned.
While seasoned predictions are valuable when it comes to investing, be sure to consult DYOR before proceeding.
AMBCrypto looked at other additional technical indicators to check the validity of the above claim.
ADA suffered a correction after the Relative Strength Index (RSI) reached the overbought level of 70. Since then, purchasing pressure has decreased significantly. But since the RSI was still above the neutral 50 at the time of writing, it was too early to issue a convincing bearish signal for ADA.
The Moving Average Convergence Divergence (MACD) line was about to make a bearish crossover with the signal line, indicating that it may be time to sell.
Source: trading view
Whales do not miss this opportunity
Interestingly, ADA whales seemed to have taken advantage of the downturn to fill their coffers. Santiment data shows that the number of addresses with more than 1,000 coins has increased since February 2.
Amid all the bearish indicators, this was a strong statement in favor of ADA over the medium to long term.
Source: Santiment
Read ADA’s 2024-25 price forecast
The ADA derivatives market is bearish
Meanwhile, short position traders continued to dominate the ADA futures market. According to AMBCrypto’s analysis of Coinglass data, the Longs/Shorts ratio has remained below 1 for the entire month of February, implying that expectations for ADA’s decline are higher than for its rise.
Source: Coinglass