Singapore – Short positions against the ADA cryptocurrency have seen a significant increase, coinciding with a notable decline in activity on the Cardano network.
Recently, Cardano (ADA) has been underperforming compared to other digital tokens. This trend has led to a surge in short positions taken against ADA, making it the third most-shorted token among all cryptocurrencies in the past 12 hours.
The downward trend for ADA began after March 27th when it experienced a drop below the $0.6700 mark. This decline of 35% was accompanied by a series of lower lows and lower highs, indicative of a bearish trend.
Despite efforts to reverse ADA’s fortunes, the Chaikin Money Flow (CMF) indicator has shown a significant decrease in money flowing into ADA, while the Relative Strength Index (RSI) plummeted to 36, signaling weakened bullish momentum.
Socially, ADA has managed to maintain consistent social volume over the past month, with weighted sentiment around ADA trending positively. This uptrend in sentiment could potentially fuel a price reversal for ADA in the near future.
However, despite the positive social indicators, the velocity of ADA has significantly decreased. The number of ADA token holders continues to rise, suggesting a growing retail interest in the token, albeit insufficient to drive up its price.
On the opposite end, the Cardano protocol has been struggling. The network has observed a notable decrease in daily transactions, dropping from 90,000 to 45,000 over the past month. Additionally, the number of daily active addresses on the network has seen a steep decline from 70,000 to 29,000 within the same timeframe.
In conclusion, the future of ADA remains uncertain as it grapples with increased short positions, a lackluster network performance, and fluctuating social sentiment. As the cryptocurrency market continues to evolve, only time will tell if ADA can overcome these challenges and regain its position among top digital assets.