Published: Mar 12, 2025 at 10:40 AM
Updated: Mar 11, 2025 at 08:52 PM
- Cardano retraces to $0.70 after a 72% surge, mirroring 2021’s price action.
- On-chain data shows accumulation, while derivatives traders reduce exposure, signaling market uncertainty.
- A breakout or bear trap? Short-seller liquidations could trigger a massive price rally.
Cardano’s ADA soared 72% in one day, reaching $1.14. Excitement quickly faded as the price dropped back to $0.70. Investors now question whether this pullback signals weakness or a setup for a massive breakout. The ADA/BTC pair remains strong, suggesting a shift toward high-cap assets for stability. A similar pattern played out in 2021. After a deep correction, ADA consolidated for 11 weeks before exploding 4,000% to $3.10. History may be repeating, making this a critical moment.
The price of ADA has fallen 47% from the recent high and consolidated for five weeks. The daily chart shows price action sitting on a strong support level. The Relative Strength Index hovers near oversold levels, hinting at a potential reversal. Derivatives data shows traders reducing risk. Open Interest has dropped 11.79% to $734.16 million. Futures contracts worth $750 million have been closed in just two weeks. Meanwhile, spot demand remains steady. Withdrawals outpace inflows, and trading volume has risen 12% to $2.01 billion. Large buyers seem to be accumulating.
Historical trends add more intrigue. The 2021 bull run started with a 52% drop, followed by consolidation. That pattern led to an explosive rally. ADA now shows a similar structure, raising speculation about another breakout. A 15 million ADA increase in the Spent Coin Age Band suggests mid-term holders are moving funds.
This movement often signals early-stage distribution or accumulation. Meanwhile, sell-side liquidity continues to be absorbed. If this trend holds, deeper consolidation below $1 could create a perfect bear trap. Short-sellers could soon face liquidation.
The way things look, a squeeze could send prices soaring, just as seen in 2021. The coming days will reveal the truth. Will ADA break out and prove skeptics wrong, or will sellers keep control? Investors are watching closely, waiting for the next move.
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