Cardano (ADA) investors saw a ray of optimism as the cryptocurrency ended the week on an upward trend. This encouraging price action was a relief, given the substantial losses ADA had incurred in the past few weeks.
Yet, the volume chart told a contrasting story, raising questions about the durability of the current upward trend.
Cardano ends the week on a high
Examining the Cardano price trend on a daily basis, we noticed a robust conclusion to last week. On the 20th of April, ADA underwent a notable surge, amounting to approximately 8.3%, and ended the day close to $0.5.
The increase that occurred marked the end of a continuous rise which started on April 18th, bringing relief from the substantial drops witnessed during the previous week.
Currently, ADA is hovering near the $0.5 mark in the market, registering a small surge of approximately 1.5%. Yet, this growth hasn’t been enough to shift ADA out of its prolonged downtrend.
The RSI analysis shows that it hasn’t crossed above the neutral threshold, implying that the price trend isn’t currently gaining traction.
Cardano volume shows a lack of convergence
Looking at the trading data for Cardano, there was a noticeable discrepancy between the price action and the level of trader involvement. Although the price was moving upwards, the volume didn’t show the same enthusiasm and hasn’t managed to exceed $500 million yet.
The volume started off strong at over $1.3 billion early in the week. However, it has dropped significantly since then, now sitting at approximately $402 million as of current update.
The difference in price and volume indicates that the price increase may not be sustainable, suggesting a possible disconnection or divergence between the two trends.
A low trading volume suggests that traders are not actively participating in the market, which is essential for fueling price growth. By increasing participation, the current price trend could potentially gain more steam.
Interest in ADA sees a slight rise
Based on my analysis of the current Cardano open interest data from Coinglass, there has been a significant drop in recent days. Although there was a minor uptick when I checked, it hasn’t regained its past heights as of now.
Currently, the Open Interest for ADA is approximately $207.8 million – a noticeable decrease compared to the over $400 million recorded around April 10th. This downward trend in Open Interest suggests less money flowing into ADA.
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2024-04-22 08:07