Signs of a Cardano Rebound? Here's Why ADA Data Says YES

Cardano (ADA)’s sentiment is shifting positively as both retail traders and institutional investors express bullish confidence. The combination of this positive sentiment, signs of buyer aggression, and a favorable trading environment suggests that ADA may soon rebound from its ongoing channel decline.

Key Takeaways

Positive Sentiment: Both retail and smart-money traders have shown increasing optimism toward ADA.
Buyer Aggression: Taker Buy CVD indicates sustained buying pressure, implying market confidence.
Long Positioning: A significant majority of top traders are favoring long positions, anticipating a price increase.
Support Testing: ADA is testing a key support level, enhancing the likelihood of a rebound.
Liquidation Data: Increased short liquidations could further fuel a potential upward move for ADA.

Cardano sentiment turns bullish: can ADA rebound from its falling channel?

A Positive Sentiment Shift for Cardano

The sentiment surrounding Cardano (ADA) is becoming increasingly optimistic as both retail investors and experienced traders adopt a bullish stance. The overall crowd sentiment has shifted to a positive level, with institutional investors (often referred to as "smart money") showing even stronger bullish indicators. This unusual alignment in sentiment, where both retail and institutional traders agree, suggests a growing confidence in ADA's accumulating support zone.

Retail trader optimism continues to rise, but the conviction from smart-money investors is particularly noteworthy since it typically responds more to changes in market liquidity. This could be a key factor as ADA approaches critical support levels, making the current timing significant.

Firm Buyer Aggression Indicated by Cardano Taker Buy CVD

The Taker Buy CVD (Cumulative Volume Delta) data shows that buyers are effectively absorbing sell pressure over the last 90 days. This trend is especially significant given that Cardano has been trading within a declining channel for several weeks. Instead of allowing sellers to gain an advantage, buyers are actively raising their bids.

Such behavior is often an indicator of an impending upward price movement, particularly when the price is close to a well-established support level. The strength of this buying activity aligns with ADA's recent efforts to rebound from its channel's lower boundary and reflects increasing confidence despite market volatility.

Cardano Spot Taker CVD (Cumulative Volume Delta, 90-day) (3)
Source: CryptoQuant

Majority of Top Traders Favor Long Positions

As of now, the Long/Short Ratio on Binance shows a strong preference for long positions, with nearly 70% of traders choosing to bet on price increases. This shift indicates significant directional confidence, especially as Cardano trades near substantial support.

Despite some recent price declines, the consistent demand for buying illustrates that traders are anticipating a rebound. The Long/Short Ratio increased prior to the current bounce attempt, reinforcing its importance. This bullish sentiment aligns with the CVD strength and the overall optimism among the crowd and smart-money investors, presenting a unified directional signal across multiple analyses. Traders now await confirmation of this conviction transforming into upward momentum.

Long/Short Ratio from Binance
Source: CoinGlass

ADA Attempts a Rebound from the Falling Channel

Cardano continues to operate within a prolonged declining channel. However, it is currently making an effort to rebound from the lower boundary. Recent price action indicates a reaction at crucial support levels around $0.37.

Notably, the MACD (Moving Average Convergence Divergence) indicator has begun to show signs of upward momentum, although this early indication does not yet confirm a trend reversal. If momentum persists, Cardano could target the mid-channel level around $0.53, which aligns with the strong sentiment and CVD dominance, making this rebound attempt more significant.

Cardano Trading Chart
Source: TradingView

Short Liquidations Enhance Rebound Potential

Recent liquidation data indicates a spike in short positions being liquidated during Cardano's latest price movements, with shorts losing more significantly than long positions across major exchanges. This imbalance could act as a catalyst for further rebound attempts since forced liquidations often accelerate upward price movements.

Although the current liquidation cluster is moderate compared to past surges, the shift favors bulls, especially at a time when ADA is testing its structural support. Patterns of increased liquidations frequently coincide with early momentum shifts, particularly at channel boundaries, supporting the ongoing setup for ADA and enhancing the likelihood of continued upward pressure.

Short Liquidation Data
Source: CoinGlass

Conclusion

Cardano finds itself at a pivotal intersection where sentiment, market orders, positioning, and price structure converge. While the broader trend remains defined by the falling channel, recent indicators suggest a strengthening bullish environment. If momentum keeps building, ADA appears ready to make an attempt at breaking out toward the mid-channel territory.

Final Thoughts

As ADA navigates this critical phase, traders and investors alike are encouraged to remain vigilant for potential confirmations of a breakout and additional movements in the coming sessions, which will ultimately dictate ADA's near-term trajectory.