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Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Cardano was trading within a bullish order block from the weekly timeframe.
- A reversal of the downtrend is expected- but buying pressure remained weak.
Cardano [ADA] saw an encouraging spike in network activity over the past few months. Santiment’s data showed that the weekly on-chain transaction volume has climbed immensely since January this year.
Read Cardano’s [ADA] Price Prediction 2023-24
The TVL to market cap ratio showed the asset might be severely overvalued, which was something investors would not want to hear. ADA was in a long-term support zone, and the bulls will be looking to reverse recent losses.
The short-term range lows offered a low-risk buying opportunity
![Cardano [ADA] bulls look to force a bounce from near-term support- will they succeed?](https://statics.ambcrypto.com/wp-content/uploads/2023/09/PP-3-ADA-price.png)
Source: ADA/USDT on TradingView
The cyan box extended from $0.239-$0.266, and represented a bullish order block from the 1-week chart. It was formed in late December 2022 and has been previously tested in June.
Due to the previous retest and rejection from the $0.365 resistance band, it is safe to conclude that the bulls are weaker this time. The OBV showed a downtrend in progress over the past month. This signaled persistent selling volume and that the buyers had not gathered the strength to make a stand yet.
The market structure and momentum on the 4-hour chart had been bearish in September, but have begun to shift over the past couple of days. Moreover, ADA has formed a range (orange) that reached from $0.25 to $0.28.
The confluence of the HTF support at $0.25 and the range lows meant an attractive risk-to-reward buying opportunity was present. A move below $0.249 would invalidate the range, and the bullish idea as well.
The spot CVD took a hit as sentiment remained lukewarm
![Cardano [ADA] bulls look to force a bounce from near-term support- will they succeed?](https://statics.ambcrypto.com/wp-content/uploads/2023/09/PP-3-coinalyze.png)
Source: Coinalyze
Realistic or not, here’s ADA’s market cap in BTC’s terms
The price action was relatively flat and hovered at about the $0.26 level over the past five days. During this time, the Open Interest slowly slid lower, which hinted at discouraged longs. The lack of capital influx meant speculator conviction was low, and they preferred to remain sidelined.
The funding rate was positive, and showed the majority of positions were bullish. The spot CVD climbed higher with great effort over the past week, but took a big hit in recent hours when ADA dipped from $0.259 to $0.256.
