The short-term market sentiment was bearish, but there is a chance for recovery.
- All the gains made in the final week of September were wiped out. The strong uptrend and buying volume has faded since the weekend.
Cardano [ADA] was forced to retreat from the $0.416 level it reached on Friday, 27th September. Bitcoin [BTC] ran into a dense resistance zone in the past four days. With disturbing developments in the Middle East, investor fears have increased selling pressure.
In an earlier report, AMBCrypto noted that the bearish market sentiment could drag ADA much lower than the $0.39 liquidity pocket. This idea has played out, and the token was back at the mid-range level.
Opportunity for swing traders
Source: ADA/USDT on TradingView
The DMI showed that the bullish trend has lost all strength, with the ADX (yellow) below 20 and the +DI (green) falling lower. The OBV fell to the level that was a support in earlier months, showing seller dominance.
The range (purple) of Cardano reached back to late July. The breakout attempt a few days ago had volume and momentum behind it, but the swift sentiment shift put bulls on the backfoot once more.
Yet, this retracement to the mid-range level offered a buying opportunity. The target is the range high at $392. The stop-loss can be set just below $0.342, the lows reached on October 1st.
Cardano selling pressure could abate
Source: Santiment
In the past two weeks, the dormant circulation has been snoozing. This was a good sign for the bulls as it showed a wave of selling was likely not imminent.
The 30-day MVRV also fell into negative territory. This meant that the recent wave of selling might be at an end as the short-term profitable holders dwindled in number.
The retest and reaction at the $0.352 support level in recent hours were encouraging. The mean coin age has slowly trended higher since August, showing a Cardano accumulation.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
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