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Cardano Above the Bear Market Bottom: Will the Price Resist Increasing Selling Pressure?

The Cardano price is trading above the bear market support bottom of $0.256.

Short positions outnumber long positions. The risk of downward volatility is increasing.

The Cardano price has been in a tight price stagnation period for the past few days. ADA is trading in a narrowing range as momentum weakens significantly. Upward attacks are consistently failing, indicating a cautious atmosphere across the cryptocurrency market.

The short-term outlook shows bearish signals. However, a group of investors is providing significant support to the market.
The Money Flow Index shows that selling pressure on ADA continues. The indicator remains below the neutral 50 level, suggesting continued capital outflows. Weak inflows indicate that investors are reluctant to buy at current price levels.

For momentum to turn upwards, a break above 50 or entry into the oversold region is needed. Currently, ADA is far from both of these conditions. Unless a strong trend reversal signal emerges, selling pressure may continue to weigh on the Cardano price.
Futures data also supports the bearish narrative. The liquidation map shows that Cardano futures are predominantly held by short positions. The size of open positions in short contracts is approximately $23 million, while the potential liquidation level for long positions is around $14 million.

This imbalance suggests that traders expect further price pullbacks. Increased short interest could increase volatility in sudden price movements. However, current positioning indicates that most traders believe weakness will continue rather than a renewed uptrend.
Continuous accumulation of short positions could further intensify price movements. If ADA attempts a recovery, the liquidation of short positions could trigger a rapid rise. Conversely, new sales would strengthen negative momentum. For now, macro sentiment in the futures market remains on the defensive.

ADA LTHs Provide Relief

Long-term investors are currently offsetting some of the selling pressure. The increase in Average Coin Age data indicates that long-held coins are remaining inactive. This trend suggests that long-term investors are preferring to HODL rather than sell.

This commitment from long-term investors is quite critical. The continuation of the HODL trend reduces the pressure on circulating supply. While this doesn't guarantee a full recovery, it helps ADA maintain certain support levels during periods of uncertainty.
ADA price must remain above this support level

Cardano is currently trading at $0.264, squeezed between the $0.295 resistance and the $0.256 support. The lower boundary coincides with the 13.6% Fibonacci retracement, often referred to as a bear market support base. ADA has held this level for approximately three weeks.

Based on current indicators, price stagnation is expected to continue. A strong defense of $0.256 could push the price back towards $0.278. If buyers remain persistent, ADA could approach $0.295 again, testing the resistance in the upper region.
However, increased selling pressure could change the whole picture. A clear break below $0.256 would weaken the support stemming from the structure. In such a scenario, the Cardano price could retrace to $0.239, invalidating the short-term bullish narrative and strengthening bearish dominance.
‍$ADA