Cardano (ADA) has been facing a stagnant period, unable to break free from consolidation since early August. Despite initial signs of bullish momentum, the price has struggled to sustain upward movement. This has raised concerns among investors about what the future holds for ADA as it approaches crucial support levels.
One potential challenge for Cardano is the market sentiment among short-term holders. The MVRV Long/Short difference, which indicates market profitability, currently shows that short-term holders are in profit. These holders typically sell during market fluctuations and highly negative values on the MVRV Long/Short difference suggest an increased likelihood of selling pressure. If a wave of short-term selling occurs, it could stall any potential upward movement for ADA, especially if the price fails to regain momentum.
More concerning is the recent shift in Cardano’s macro momentum, as indicated by technical indicators like the Moving Average Convergence Divergence (MACD). The MACD has recorded its first bearish crossover since mid-August, signaling a loss of upward momentum and the potential for a continued downtrend. This bearish momentum introduces challenges for ADA, casting a shadow over its near-term outlook.
Currently, Cardano’s price has dropped by 10% and is below the $0.33 level, which has been a crucial support floor for over a month. Losing this level indicates further downside for ADA. While a recovery is still possible, ADA may continue to consolidate below $0.33, as it has struggled with this level acting as resistance in recent months. If ADA remains range-bound, it is likely to trade between the $0.31 support and $0.33 resistance in the short term.
If Cardano manages to breach $0.33, it will then face resistance at $0.37, a key barrier marking the upper limit of its recent consolidation range. Only a breakthrough above $0.37 would invalidate the bearish-neutral thesis and signal a stronger uptrend for ADA.