Confidence in Cardano (ADA) is showing signs of weakness. Cardano long-term holders (LTHs) are registering losses for the first time in three months. This situation erases recently obtained gains. Data from the analytics platform Santiment confirms this bearish trend.
The MVRV Long/Short Difference indicator shows a sharp decline. It compares the average profitability of LTHs versus short-term holders (STHs). Following ADA’s recent pullback, many long-term investors are now underwater (holding below their cost basis). This reduces their incentive to maintain their positions. Additionally, the Relative Strength Index (RSI), visible on TradingView, offers another bearish signal. The RSI currently sits below the neutral 50.0 level. This technical indicator reinforces the dominant bearish sentiment. A prolonged stay in this negative zone often correlates with further corrections.
The profitability of LTHs is crucial for price stability. Historically, when veteran investors begin to sell or hold at a loss, selling pressure in the market intensifies. This scenario creates an environment of uncertainty for the entire ecosystem. Although short-term traders (STHs) might see buying opportunities at lower prices, their behavior is different. They tend to take profits quickly at the first sign of a recovery. This dynamic prevents solid upward momentum from forming.
Can ADA break the $0.70 resistance without its investors’ support?
This rapid profit-taking by STHs could limit any sustained rebound. At the time of writing, Cardano’s price is trading at $0.645. It holds just above the key support level of $0.623. However, the asset faces strong resistance at the $0.667 and, more importantly, $0.699 levels. If ADA fails to break these barriers, the price could enter an extended consolidation phase. This sideways movement would keep Cardano in a neutral-to-bearish phase. It would prevent a strong short-term recovery.
The path to recovery for ADA looks complicated. A neutral-to-bearish scenario will persist as long as the confidence of Cardano long-term holders does not improve. The only clear sign of a bullish reversal would be a decisive breakout above $0.699. This move could propel the price toward the next target of $0.754. For this to happen, demand on the blockchain must overcome the selling pressure from short-term traders. Investors are watching to see if LTHs will resist the temptation to sell at a loss.
