The Downside of Cardano’s Price Surge
Cardano’s Overbought RSI and Increased Liquidation
Cardano’s recent price surge of over 20% seemed promising, but the token was already showing signs of a downtrend. In fact, Cardano’s Relative Strength Index (RSI) was overbought and liquidation had increased, indicating potential trouble ahead for the digital asset.
Are Cardano investors really earning profits?
According to CoinMarkatCap, ADA has surged by over 20% in the last seven days, leading to increased trading volume and seemingly profitable outcomes for investors. However, the reality is different. IntoTheBlock’s data showed that more than 60% of ADA investors were ‘out of the money,’ indicating that the current price of ADA was lower than its average cost.
Selling pressure on ADA is increasing
Some crypto analysts predict a potential price correction for Cardano, with evidence pointing toward a decrease in ADA’s value over the last 24 hours. AMBCrypto’s analysis of Hyblock data revealed that ADA’s liquidation increased over the last few days, further indicating a downtrend. Additionally, ADA’s Relative Strength Index (RSI) was in an overbought zone, increasing the likelihood of continued downward movement.
ADA’s Funding Rate and Market Indicators
When ADA’s price increased on November 7th, its funding rate dropped slightly, suggesting reluctance from derivatives investors to buy the token at a higher price. Furthermore, ADA’s price touched the upper limit of the Bollinger Bands, and its Money Flow Index (MFI) registered a downtick, both pointing towards a continued downtrend.
Overall, Cardano’s recent price surge may have made some investors cautious, given the various market indicators pointing toward a potential price correction in the near future.
### News source: ambcrypto.com