Cardano has faced several failed rallies recently, a pattern that typically triggers bearish reactions from traders.
However, unlike many altcoins, a strong faction of ADA investors remains optimistic, expecting the price to rise despite these setbacks.
Cardano Is Losing Its Grip
The correlation between Cardano and Bitcoin has dropped to -0.27, indicating ADA is currently moving independently of Bitcoin’s price trends. This decoupling is concerning since Bitcoin recently hit a new all-time high (ATH), and ADA’s failure to follow could signal weakness in the altcoin’s momentum.
Historically, negative correlations like this have preceded price corrections for Cardano. If this trend repeats, ADA could face a significant price drop in the coming days.
Despite mixed market signals, Cardano traders remain bullish, as reflected by the funding rate. Mostly positive funding rates, throughout the month, show that long contracts have been dominating short contracts. This indicates that traders expect ADA’s price to rise and are maintaining a strong bullish outlook.
This optimism contributes to an overall positive investor sentiment, which may provide some cushion against potential downward price pressure. As long as traders hold this bullish stance, ADA might avoid a sharp decline despite the current bearish undertones.
ADA Price Is Holding On
Cardano’s price is currently trading at $0.74, holding above key support levels. The mixed signals from correlation and funding rate suggest that ADA is likely to maintain this support for the near term, balancing between bullish hopes and bearish risks.
However, if bearish pressures intensify, Cardano could slip below $0.74 and test the $0.69 support level. A drop to this level would erase a substantial portion of the profits gained this month and deepen concerns about the altcoin’s near-term prospects.
On the other hand, if Cardano’s correlation with Bitcoin improves, the price could bounce off $0.74 and push toward $0.80. Such a move would invalidate the bearish thesis and signal a potential recovery, encouraging renewed investor confidence in ADA’s upward trajectory.
Disclaimer
In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
