Cardano Bears in Control, but a Bullish Setup Could Change Everything
Crypto.news data indicates that Cardano has been declining. Due to a weakening TVL and stablecoin supply, the price of Cardano has fallen 63% since its October peak. But it has been developing a bullish reversal pattern that, if confirmed, might result in a 45% increase in the future.
Falling TVL and Open Interest Weigh on Cardano Price Outlook
The total value locked across all blockchain-based DeFi protocols has drastically decreased, according to statistics from DefiLlama. From its August peak of $544 million, it fell to $215.5 million. A declining TVL suggests a decline in user engagement and may indicate that investors are losing faith in the network’s capacity to expand.
At the time of writing, the entire market capitalization of stablecoins on the blockchain had fallen from a peak of $40.48 million in November to $37.68 million. Additionally, it appears that leveraged traders are no longer interested in the token. According to CoinGlass data, open interest in ADA Futures has decreased from $1.72 billion in October to $651 million at the time of writing. When taken as a whole, these declining indices have made investors wary and sentiment brittle. This has had a significant impact on price performance.
Cardano RSI Divergence Signals Potential Upside Move
Charts have shown a bright outlook for the token despite the general decline in on-chain statistics and investor activity. Since early October of this year, a falling wedge has been formed by the price of Cardano on the daily chart. Two trendlines that converge and descend make up the pattern. Historically, it has been a hint that the current downward trend has slowed down when an asset exits such a structure from the upper side.
A possible rebound may be imminent, according to momentum indicators like RSI, which has created a bullish divergence. The 20-day SMA at $0.39 will be the focus of traders’ attention for the time being. A break above it would signal a breakout from the wedge pattern. ADA might then rise to $0.51 in that scenario.
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