Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Cardano retested the mid-range mark as resistance over the weekend
- The drop below the daily support zone meant the bears were in the driving seat
Cardano [ADA] saw high development activity in September, which was great news for long-term investors. The short-term price action showed ADA traded within a range that extended from $0.238 to $0.28.
Read Cardano’s [ADA] Price Prediction 2023-24
AMBCrypto’s analysis piece of Cardano dated 6 October highlighted that $0.25 was a key buying level. It also underlined the $0.28 resistance as the one to beat for ADA bulls. At press time, buyers were struggling to keep prices above the $0.25 level. Should traders look to short the token?
The bearish market structure shift handed bears a decisive advantage in the near term
The cyan box at $0.25 was a bullish breaker block on the daily timeframe that formed on 19 September. At press time the H4 chart showed ADA was on the verge of falling through. This would invalidate the bullish breaker and signal seller dominance.
The On-Balance Volume (OBV) had noted gains late in September, but its recent downturn meant selling volume was overwhelming in recent days. The Chaikin Money Flow (CMF) was at -0.26 and indicated heavy capital flow out of the Cardano market.
The bearish market structure, combined with the reading of 32 from the Relative Strength Index (RSI), meant that ADA traders could anticipate further losses. To the south, the range low at $0.238 coincided with the H4 bullish order block. Therefore, bulls can wait for a reaction in that region and look for buying opportunities.
The steady fall in the spot CVD was not good news for buyers
The Open Interest (OI) saw a sharp fall worth $6 million contracts as Cardano prices were slashed from $0.258 to $0.2505, a 3% drop. This signaled a bearish sentiment in the market. The spot Cumulative Volume Delta (CVD) also saw a massive decline in recent hours.
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A downtrend in the spot CVD is usually not a good thing for bulls. ADA traders can look to short the asset to the range low, but it could be a risky venture as Bitcoin [BTC] was in a demand region. A higher probability trade would be to wait for a drop in Cardano prices this week toward $0.238. A fall below the H4 bullish order block to $0.235 would invalidate this bullish idea.