- Cardano continues to consolidate below $1, a structure that historically precedes breakout rallies.
- Is this dormant liquidity coiling for a major move?
Cardano [ADA] is stuck in a range-bound movement below $1, recently breaking key support at $0.85 and plunging 23%. The 1D chart now highlights a potential demand zone near $0.65.
But hey, don’t get too excited about that breakout beyond $1, because there’s some strong resistance waiting to pounce. Reclaiming $0.85 could signal renewed bullish momentum, setting up a retest of the $0.95 ceiling.
Cardano has gained 4.45% in the past 24 hours, thanks to a broader market recovery as the total crypto market cap approaches $3.20 trillion, up 1.82%, liquidating $871.64K in ADA shorts.
However, trading volume, which spiked above $1 billion during ADA’s dip to $0.65, has now dropped 24.16% to $668.4 million. If volume fails to recover, the current price surge may be driven by a short squeeze rather than strong fundamental demand.
Is Cardano poised for a deeper pullback?
Cardano’s tight consolidation between $0.65 and $0.85 has fueled breakout speculation.
A bullish MACD crossover and an oversold RSI suggest growing upside momentum, further supported by the broader market recovery.
However, smart money inflows, which peaked in mid-January alongside ADA’s rally to $1.15, have since declined, closely tracking its 43% pullback.
In the derivatives market, Open Interest has risen by 2.16%, indicating traders are positioning for ADA’s 4% intraday surge.
However, with weak underlying fundamentals, this price action could be liquidity-driven rather than a trend reversal. Growing speculative exposure with low spot buying interest increases the likelihood of a long squeeze.
Over $100 million in leveraged positions are at risk of liquidation, indicating that Cardano’s current levels may not present a strong “dip-buying” opportunity.
A pullback to the $0.65 support remains in play. Failure to hold this level could trigger further downside, potentially extending the correction. Watch closely!
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2025-02-20 12:12