Cardano's ADA Faces Bearish Storm: Short Sellers Triple Long Positions

Cardano, the fifth-largest cryptocurrency by market capitalization, is facing downward pressure as funding rates hit a yearly low and the support level of $0.31 becomes critical. The bearish sentiment in the market has led to a potential price decline for ADA, with traders heavily shorting the cryptocurrency.

On-chain analytics firm Coinglass reports that traders are strongly betting on the short side, with long positions over-leveraged at $0.85 and worth $4.10 million. Short sellers, on the other hand, are over-leveraged at the $0.912 and $0.926 levels, holding $16.77 million worth of short positions. This indicates a bearish signal, as short sellers are three times stronger than traders holding long positions.

Despite the bearish short-term outlook, long-term holders and investors see the current market sentiment as an opportunity to accumulate ADA tokens. Data from Spot Inflow/Outflow reveals that exchanges have witnessed an outflow of $30 million ADA tokens in the past 48 hours, indicating potential accumulation. Some experts view this outflow as an ideal long-term buying opportunity.

Technical analysis by AMBCrypto suggests that ADA appears bearish, as it has successfully retested the ascending trendline breakdown level and has begun moving in a downtrend. Based on recent price action and historical momentum, ADA could drop by 15% to reach $0.71 in the coming days. However, the overall market appears to be under significant pressure due to traders' strong bearish outlook, which could further strengthen ADA's bearish trend.