Cardano Faces Pullback Risk as TD Sequential Flashes Sell Signal

Cardano May Dip as TD Sequential Indicator Signals Sell

The broader crypto market rebounded by 1.5% in the past 24 hours, trimming recent weekly losses. Ethereum was the most improving, gaining 2.7%, as whales stacked, and Bitcoin also followed, up 0.87% to trade about 114,664.

However, despite the upside momentum, Cardano  price flashed a TD Sequential sell signal on its 4-hour chart, raising questions about its short-term trajectory.

Cardano Price Flashes Sell Signal, What’s Next

Cardano price jumped 2.5% in 24 hours, pushing its 30-day rally to over 28% amid altcoin market strength. Nevertheless, the TD Sequential indicator produced a 9 sell signal, which implies that momentum may start changing in the short term.

Cardano Sell Signal | Source : X

ADA trades near $0.742 after rebounding from the 200-day EMA and approaching the $0.7857 Fibonacci resistance level. Sentiment remains cautious since RSI and MACD point to a recovery, but the sell signal is historically used as a local top indicator.

Cardano Price Analysis : Source : TradingView

Cardano price bearish breakout below $0.74 can initiate a retracement to the range of $0.70-0.72, strengthening the short-term bearish momentum. However, upside momentum may be restored with a breakout above $0.8144 and will create a path to the $0.9358 resistance zone.

Additionally, open interest increased 2.10% to 1.29 billion to indicate that capital is still active in the derivative market. Nevertheless, Cardano price volume decreased by 13.16%, and the options activity decreased by more than 92% which indicates weak conviction and low hedging demand.

Long/short ratios remained above 2.4 on Binance and OKX, which indicated traders remain bullish despite the technical analysis. The funding rate of Cardano also grew positive, which means some are ready to pay premiums on long positions.

Meanwhile, Binance registered a 768,000 net inflows on an hourly basis on ADA, but the spot trading volume declined to $4.07 million. This indicated that big buyers are present, but the overall participation is drying up and the market liquidity is becoming narrow.

Macroeconomic Uncertainty and Cardano Developments 

Risk assets, such as cryptocurrencies, including ADA and Ethereum, are further troubled by mixed news emerging in the U.S. labor market. The non-farm payroll said that 73,000 jobs had been added, but Household Survey showed that 260,000 jobs were lost in July.

It is one of the biggest monthly unemployment declines since 2020, and it caused analysts and investors alike to worry. The 3-month average fell to -287,667, which is the second-lowest reading recorded since the pandemic and could be a red flag to the economy.

Household Survey Employment MoM Change | Source : X

The deviation indicated that there could be economic strain, and it raises volatility in both conventional and digital markets in the short-term.

In the meantime, the fundamentals of Cardano are very healthy despite the temporary technical pressure, as crucial upgrades and governance-supported developments. SEC is supposed to make its decision on the proposed Grayscale ADA Trust ETF by the end of August.

Such an outcome would create a positive impact as more institutions learn about ADA and gain credibility in the long-term with the participants of traditional finance. Past success in approving ETFs on Bitcoin and Ethereum led to higher capital inflows and increased market legitimization of the crypto industry.

Moreover, the developer of Cardano, Input Output Global (IOG) was given funding of $71 million by the treasury to develop an infrastructure development roadmap of one year. 

Future projects involve Hydra, aiming to scale, and Acropolis, which works on the modularity and validator performance of the ADA node. Such are meant to lower the cost of networks, enhance their performance, and encourage more developers to join the ADA ecosystem.

The proposal passed with 74% of the voters, but there were objections to transparency and granularity of funds distribution. However, the updates should enhance the technical status and the future network usefulness of ADA.