Cardano (ADA) had a promising start to 2024 with a more than 5% increase on January 1st, reaching above $0.60. However, subsequent days saw these gains quickly diminish. Detailed analysis of the daily chart revealed a 2.9% decline on January 2nd and an approximate 8% loss on January 3rd, aligning with the broader market downturn. Indicators such as the Moving Average Convergence Divergence (MACD) consistently pointed to a bearish trend for ADA.
Both the Relative Strength Index (RSI) and MACD suggested a bearish trend following the recent price drop, with the RSI marginally below the neutral line. ADA was trading around $0.56, reflecting a 1.6% increase. Santiment’s volume chart showed significant activity amidst price volatility, with volume spiking from around $400 million to over $1 billion between January 1st and 3rd.
The volume trend could indicate a notable increase in ADA sales over the last two days, signaling a potential sell-off. This inference is drawn from the correlation between the cryptocurrency’s price direction and increasing volume. If the price had risen with volume, it could have signaled an accumulation trend. Despite price fluctuations, Cardano’s funding rate remained consistently positive, with Coinglass reporting a rate of around 0.07% on January 2nd.
This suggested that most traders remained optimistic about a potential price increase, even amidst the downturn. However, the significant price drop influenced sentiment, causing the funding rate to fall to around 0.03% on January 3rd. The latest updates show the funding rate further decreased to approximately 0.009%, indicating a noticeable decline in optimism among investors, despite the ongoing positive atmosphere.