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In the last 24 hours, whales sold a significant amount of ADA, forcing a fall.
Other key technical indicators in the derivatives market influenced a downward trend as well.
Sentiment around Cardano [ADA] has been notably bearish, as investors have been selling over the past month. This may continue, as recent market revelations show that continued selling efforts have been dominant.
Whales offload major ADA
Whales, who typically control a major supply of the asset, have continued selling over the past 48 hours, bringing total sales to 120 million.
When there’s a massive sell-off like this in the market, it implies a lack of confidence, and thus, there’s potential for ADA to continue trending lower.
In the derivatives market, the selling pressure looked more evident, as Open Interest in the Futures and options market continued to fall.
Press time data showed a 1.01% and 0.27% slip to $697.15 million and $374.92k, respectively, in the past 24 hours.
A drop in Open Interest in the derivatives market implies that there has been closure of contracts, with several factors including lack of confidence and long liquidation contributing to the fall.
The trading volume has been largely dominated by sellers, as the long-to-short ratio— that points to high buying volume when above 1 and strong selling pressure when below 1—had a press time reading of 0.9767.
With more sellers than buyers in the market, it could influence ADA to continue dropping, unless the metric crosses above 1 again.
AMBCrypto found that DeFi investors are also selling, as the Total Value Locked (TVL), used to evaluate the value of protocols on the Cardano chain, has plunged notably.
From a high of $319.58 million in April, it had declined by $15.54 million to $304.04 million at press time.
If DeFi investors continue to unlock their ADA deposited across these protocols, then the asset will likely continue to plunge.
Bullish opposition arises
Despite the predominant bearish trend in the market, spot market traders have continued to accumulate the asset over the past week.
According to AMBCrypto’s look at Coinglass’ netflow data, traders kept buying and moving their assets into private wallets, suggesting signs of long-term market commitment.
In the past week alone, $11.23 million worth of ADA has been bought, following the preceding week’s $44.75 million worth of ADA purchases.
However, the effect of bullish spot market traders would have minimal impact unless other key market sentiments shift in a bullish direction.
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