ADA's 11% Rally Fades as Cardano ETF Hype Wanes

ADA Reverses Gains as Cardano ETF Hype Fizzles Out

Cardano’s ADA token recorded an 11% intraday rally on Tuesday, February 10, following news that Grayscale Investments had filed an application for the first-ever spot exchange-traded fund (ETF) in the US. However, the rally proved to be short-lived, with ADA shedding 4% of its recent gains in the past 24 hours. At press time, the ninth-largest cryptocurrency by market value was trading at $0.76.

ADA’s daily trading volume has rallied amid this value decline, totaling $1.44 billion and climbing 48% over the past 24 hours. This increase in trading volume, coupled with a decline in ADA’s price, signals increased selling pressure, suggesting that more traders are offloading their holdings. This indicates bearish sentiment and profit-taking among ADA holders, potentially leading to further declines if selling persists.

The coin’s negative Balance of Power (BoP) confirms the selloffs among market participants. At press time, this momentum indicator was at -0.54, indicating that sellers are in control and that the ADA downward pressure is strong, with the asset likely experiencing a bearish trend.

ADA’s double-digit surge on Tuesday propelled its price above a long-standing descending trendline. However, a retest of this breakout level could fail, with selloffs gaining momentum. If that happens, ADA may fall to $0.70. If this level fails to hold, the coin could extend its decline toward $0.53, a level last seen on February 3.

Conversely, a surge in accumulation and improved market sentiment could fuel a rally to $0.82. However, with the Cardano ETF hype waning, ADA’s recent gains may be difficult to sustain. Traders should closely monitor market conditions and be prepared for potential price fluctuations.