Cardano (ADA) has recently experienced a significant price correction, dropping 12% in 48 hours to test a critical support level. This downturn has ignited a fervent debate among traders and investors, as many eye this crucial juncture as a potential turning point, while others remain cautious of further declines. The market is currently grappling with a mix of strong bullish bets and underlying selling pressures.
Divergent Market Sentiment and Technical Reversal Hopes
Despite the recent price dip, a notable surge in trading volume suggests heightened investor interest in Cardano, with many perceiving the current price as an opportune entry point. Data reveals an overwhelmingly bullish sentiment, as nearly 80% of traders are betting on a price rebound, reflected in a Binance ADAUSDT Long/Short Ratio of 3.99. This optimism is largely fueled by technical analysis, which shows ADA resting on an ascending trendline that has historically served as strong support since August 2025. Should ADA hold above this trendline, a significant reversal could see the altcoin rise by 14% to $0.9791, with a potential for a 20% surge to $1.20 if it breaches the $1 mark. The Relative Strength Index (RSI) also hints at a possible reversal, nearing oversold territory.
Underlying Risks and Selling Pressure
However, the outlook is not entirely without caution. While many are optimistic, key indicators suggest lingering downside risks. The Supertrend indicator remains red, signaling that ADA is still in a downtrend with considerable selling pressure. More critically, a substantial $5.95 million worth of ADA tokens has recently moved onto exchanges. Such inflows typically indicate that investors are looking to sell or take profits, which could add significant downward pressure and potentially extend the altcoin's bearish momentum, challenging the prevailing bullish sentiment.
