Key takeaways
ADA is down 4% in the last 24 hours and is now trading below $0.37.
The bearish trend could see ADA decline below the $0.30 psychological level.
Cardano’s on-chain shows further bearish movement
Cardano’s ADA is down by 4% in the last 24 hours, making it one of the worst performers among the top 10 cryptocurrencies by market cap. The bearish performance comes amid poor on-chain data.
According to Santiment’s Social Dominance metric for Cardano, the current outlook for the cryptocurrency remains bearish. The index measures the share of ADA-related discussions across the cryptocurrency media.
This metric has consistently declined since mid-November, reaching an annual low of 0.032% on Thursday. This dip indicates fading market interest and weakening sentiment among Cardano investors.
As more traders move their coins from wallets to exchanges, ADA continues to face selling pressure as investors decrease their exposure to the market.
On the derivatives aspect, data also supports a further bearish outlook for ADA. Coinglass’s OI-Weighted Funding Rate data show that the number of traders betting that the price of ADA will decrease as more traders expect a price decline in the near term.
The OI-Weighted Funding Rate turned negative on Thursday, down 0.0019%, suggesting that shorts are paying longs. If this metric flips negative, ADA usually faces heavy selling pressure.
ADA could retest $0.30 as bears remain in control
The ADA/USD 4-hour chart is bearish and inefficient as Cardano has underperformed over the past few days. The coin faced rejection from the upper trendline of the falling wedge pattern on December 9 and has lost 22% of its value since then.
At press time, ADA is trading at $0.36 and could dip lower in the near term. If ADA continues its downward trend, the bears could push the price towards the October 10 low of $0.27.
The Relative Strength Index (RSI) on the 4-hour chart reads 31, nearing oversold territory, indicating strong bearish momentum. Furthermore, the Moving Average Convergence Divergence (MACD) indicator showed a bearish crossover on Monday, further supporting the negative outlook.
If the bulls regain momentum, ADA could rally towards the 50-day EMA at $0.47 over the next few days.
