Cardano (ADA) is showing signs of a potential rebound as its funding rate edges into positive territory after nearly a week in the negative zone. This shift suggests a change in trader sentiment, sparking optimism among investors.
Cardano’s Recovery Gains Momentum
ADA is currently trading at $0.80 after a sharp 16.8% decline over the past 48 hours. The drop saw the cryptocurrency struggle to break the $0.99 resistance level, but a strong support base at $0.77 has provided a foundation for recovery.
A crucial factor in ADA’s potential uptrend is its funding rate. When negative, it indicates short-seller dominance, signaling bearish sentiment. However, the recent move toward positive suggests an increase in long positions, hinting at growing trader confidence in an impending price rebound.
Market Value to Realized Value (MVRV) Backs Bullish Outlook
One key metric reinforcing ADA’s recovery prospects is the Market Value to Realized Value (MVRV) Long/Short Difference, which currently stands at 23%. This indicator measures the profitability of long-term holders (LTHs) against short-term traders.
A positive MVRV suggests that long-term investors are in profit, reinforcing stability in the market. As these investors continue to hold rather than sell, selling pressure decreases, increasing the likelihood of a sustained price recovery.
ADA’s Next Price Targets
If ADA maintains support above $0.77 and the funding rate continues its positive trend, a move to $0.85 is likely. Reclaiming this level as support would pave the way for a retest of $0.99, with a potential breakout toward the psychological $1.00 mark.
However, risks remain. If broader market conditions weaken, ADA could slip below $0.77, invalidating the bullish scenario and exposing the cryptocurrency to a further decline toward $0.70.
Also Read: Cardano Partners with SERPRO: Can ADA Hit $2?
Cardano’s price action suggests a turning point, with bullish indicators like the improving funding rate and positive MVRV supporting recovery prospects. Traders should watch key support and resistance levels closely, as a break above $0.85 could signal the start of a stronger uptrend.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of CoinBrief.io. Before making any investment decisions, you should always conduct your own research. Coin Brief is not responsible for any financial losses.
