Cardano’s price has experienced a massive drop recently following the Ethereum crash. However, things are still looking more positive for ADA, compared to ETH.

By Edris Derakhshi (TradingRage)

The USDT Paired Chart

Against USDT, the cryptocurrency has been consolidating between $1.2 and $0.8 over the past few months, forming a large descending channel pattern.

However, it broke down to the downside during the crypto market crash led by Ethereum, and ADA’s price briefly traded below its 200-day moving average, located around the $0.6 mark, before rebounding higher.

Currently, the price is trying to hold above the $0.8 support level, which would be vital if a bullish shift is bound to occur soon.

The BTC Paired Chart

The ADA/BTC chart shows a somewhat similar picture to that of the USDT-paired one. However, ADA is weaker than BTC.

The market has lost a key support level at 900 SAT and is now testing the 200-day moving average, which is located around the 750 SAT level.

In case of a breakdown, a deeper drop toward the 500 SAT area would be imminent. However, as the RSI is showing a clear oversold signal, a pullback toward the 900 SAT level looks more likely at the moment.

[PRESS RELEASE – Mahe, Seychelles, February 5th, 2025]

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Ethereum’s price is yet to recover from the drop it has been experiencing lately. Therefore, more downside could be expected in the coming weeks.

Technical Analysis

By Edris Derakhshi (TradingRage)

The Daily Chart

On the daily chart, the price has been making lower highs and lows since getting rejected from the resistance at $4,000. Several support levels have been lost in the last few months, especially the 200-day moving average, located around the $3,000 mark.

While the price has already dropped to the $2,200 support and rebounded, there is still the chance for the market to decline lower as long as the cryptocurrency remains below the 200-day moving average.

The 4-Hour Chart

Looking at the 4-hour timeframe, the price has gradually declined inside a large falling wedge pattern. While the market broke the pattern to the downside on Monday, it recovered, reclaiming the $2,800 level. Yet, the RSI still shows values below 50%, indicating that the momentum is still bearish.

Therefore, if the price does not break back above the $3,000 level soon, a deeper correction or a longer consolidation could be expected in the coming weeks.

Sentiment Analysis

By Edris Derakhshi (TradingRage)

Ethereum Open Interest

As Ethereum’s price is in a steep downtrend, market participants wonder where the price will finally find support. Analyzing the futures market sentiment could provide helpful insights into this situation.

This chart presents the Ethereum funding rates metric, which measures whether the buyers or the sellers are executing their orders aggressively (using market orders) on aggregate. Favourable funding rates indicate bullish sentiment, while negative values show bearish sentiment.

As the chart suggests, the funding rates have dropped significantly following the recent crash. Judging by its current values, it is safe to say that the futures market is no longer overheated. However, without sufficient demand in the spot market, the market will not be able to recover any time soon.