Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- ADA dipped below January lows and retested December lows.
- CVD rose, but OI stagnated.
Bitcoin [BTC] dropped back to $25k at the time of writing, exposing altcoins to more price drops. Cardano [ADA] was no exception, as it dropped more than 30% weekly, according to CoinMarketCap. However, an attempt has been made to reverse recent losses in the past 24 hours.
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The price of ADA was $0.2622 at the time of going to press, up 9% in the past 24 hours. A dovish stance from the FOMC at the June 13/14 meeting could tip the bulls to gain more ground. But the likely rally could be a bull trap if BTC falters at $26.6k and fails to transition to a bullish bias in the higher time frame.
Will Bulls Reverse Recent Losses?
Source: ADA/USDT on TradingView
So far, ADA has retreated from 2023 highs ($0.462) from mid-April to December lows of $0.221 before reversing some of the losses at the time of writing. The Fibonacci retracement tool (yellow) was plotted between the April high and the recent June 10 low.
The RSI has been eerily below the median point since mid-April and has dropped deeper into the oversold zone at press time. It shows increased sales pressure. The price drop was also marked by increased trading volumes as selling pressure increased.
Therefore, sellers could again drag ADA to $0.22 or $0.164 if sentiment continues and BTC fails to turn bullish.
A bullish BTC, especially if FOMC takes a mild stance, could lead ADA to rally and target the 50% Fib level ($0.341). But bulls have to overcome the obstacle at $0.3 to gain leverage. Such a move could help the bulls gain more ground and reverse recent losses.
CVD increased, but OI stagnated
Source: Coinalyse
On the 1-hour chart, the aggregated CVD (Cumulative Volume Delta) spot, which tracks buy and volume orders, has risen sharply over the past few hours. It indicates buyers pushing sellers back.
How many 1,10,100 ADAs worth today?
However, the bulls’ efforts may be short-lived if open interest (OI), the number of open contracts in the futures market, remains below $130 million.
The OI stagnated below $130 million after a sharp drop from $180 million on June 10. This could delay a strong recovery unless BTC rises above $27k.
