Cardano (ADA) briefly fell to $0.78 this week amidst increased volatility in the crypto market.
While it has since recovered, the subsequent change in crowd sentiment around the asset may open up a potential buying opportunity.
Hidden Buying Opportunity
While retail traders have historically fueled short-term price moves with bouts of “greed” (overwhelming bullish commentary leading to pullbacks) and “fear” (bearish commentary sparking rallies), the latest data by Santiment flagged the most bearish crowd sentiment in five months.
With a bullish-to-bearish commentary ratio of just 1:5:1, ADA sentiment has flipped sharply negative compared to its usual optimism. Interestingly, this contrarian setup has already aligned with ADA rebounding 5%, climbing from $0.78 to $0.819 in a span of two days.
Santiment explained that prices often move against retail expectations. As such, when impatient traders sell off during downswings, larger stakeholders tend to accumulate, which helps in fueling recoveries. For patient holders and dip buyers, ongoing retail pessimism could prove to be a positive signal for further upside.
This sentiment coincides with technical signals pointing to renewed strength.
Bullish Setup for Cardano
A popular analyst ‘Crypto King,’ pointed out that ADA is currently shaping a bullish pattern. His analysis found that the token is currently trading in an ascending channel pattern, with price action steadily climbing toward resistance levels.
The key takeaway is that ADA looks primed to make a quick move past the $1 mark if momentum continues. The price could also be drawn toward higher levels with the next zones of interest appearing around $1.20 and $1.40.
ADA has also triggered a buy signal on the TD Sequential, an indicator for spotting trend reversals. This development means that bearish momentum may be fading, which could potentially set ADA up for a fresh leg higher if buying pressure builds.
Meanwhile, analytics platform TapTools observed that ADA has quietly outperformed several major cryptocurrencies over the past 90 days, as it delivered a gain of more than 25%. This performance puts it ahead of Dogecoin (DOGE), Sui (SUI), Bitcoin (BTC), and Tron (TRX) during the same period.
The post Cardano’s (ADA) Retail Traders Turn Bearish: But Whales May Smell a Bargain appeared first on CryptoPotato.
