Cardano Price Warning Flashes — Is the 10% ADA Rally Masking a Rising Sell Wave?
Despite a recent 10% ADA rally, technical indicators like hidden bearish divergence and rising on-chain movement suggest underlying selling pressure remains.Summary
Cardano (ADA) has seen a short-term rebound of about 10% from its March 4 low, but structural risks persist. The 12-hour chart shows a developing head-and-shoulders pattern with a neckline support near $0.26. Furthermore, a hidden bearish divergence is present, as the price made lower highs between March 2 and March 4 while the RSI made higher highs, typically signaling trend continuation to the downside.
On-chain data supports this caution, showing a 54% surge in ADA coin movement between March 3 and March 5, indicating holders may be preparing to sell during the rally. Derivatives markets show leveraged traders hold about $22 million in long liquidation exposure versus $17 million in short exposure, increasing liquidation risk if prices drop. Crucially, major whale cohorts have remained inactive, suggesting a lack of strong spot demand to absorb potential selling.
Cardano is currently testing resistance near $0.28. A close above $0.28 could signal buyer control, but a confirmed breakdown below the $0.25 neckline would validate the bearish pattern, potentially leading to a drop toward $0.21.
(Source：BeInCrypto)