Cardano (ADA) is showing signs of selling pressure, as the recent sell signal indicates the price may struggle to test the $0.50 mark. Last week, ADA's price was at $0.42, but it has since declined to $0.38, leaving investors concerned about a quick recovery.
One indicator pointing to this bearish outlook is the Market Value to Realized Value (MVRV) Long/Short Difference. This oscillating metric indicates whether long-term holders possess more unrealized profits compared to short-term holders.
A higher MVRV Long/Short Difference suggests bullish sentiment, as long-term holders dominate. Conversely, a negative Long/Short Difference, currently at -25.67%, indicates short-term holders are in a better position, highlighting that ADA has yet to exit the bearish phase.
Another critical metric is the Daily Active Addresses (DAA) divergence. This metric reveals if price increases correlate with user activity. A positive DAA suggests strong network activity, while a negative DAA indicates a lack of user engagement, reinforcing the sell signal for ADA.
On the daily chart, Cardano broke out of the descending triangle on September 22, reaching $0.42. However, it is now trending downward again. If the price slips below the support level of $0.35, it could drop to $0.31.
If bullish sentiment prevails and ADA stays above $0.35, there may be a chance for a rebound. Increased buying pressure could help the price climb back to $0.40 or even $0.46, with a possibility of reaching $0.50.
Read more: How To Buy Cardano (ADA) and Everything You Need To Know
