Cardano (ADA) dropped to $0.27 on August 5 during a market sell-off, leading to over $1 billion in liquidations. ADA then rebounded by 19%, reaching $0.37 as the market stabilized.
Cardano’s futures open interest surged by 21% to $191 million. This rise in open interest suggests more traders are entering new positions, leading to increased market activity.
The predominantly positive funding rates for ADA over the past week show that most traders favor long positions. A current funding rate of 0.0067% indicates expectations of a price rise.
Funding rates in perpetual futures contracts are used to keep contract prices in line with spot prices. Positive rates mean higher demand for long positions, reflecting bullish market sentiment.
The ratio of daily transaction volume shows more profitable ADA transactions, with a current ratio of 1.11, reinforcing optimism about ADA’s price trajectory.
Cardano’s technical indicators, like the Chaikin Money Flow (CMF) and Relative Strength Index (RSI), show growing buying pressure and liquidity inflow. These indicators suggest that ADA could retest its two-month high of $0.40.
However, if profit-taking intensifies and the trend reverses, ADA’s price could drop by 27% to revisit $0.27. This underscores the need to monitor market momentum and sentiment closely.
