Cardano’s ADA recorded an 11% intraday rally on Tuesday after news broke that Grayscale Investments applied for the first-ever spot exchange-traded fund (ETF) in the US.
However, the rally has proven to be short-lived, as the coin has posted losses today. ADA trades at $0.76 at press time, shedding 4% of its recent gains in the past 24 hours.
Cardano ETF Hopes Drive Gains, But There Is a Catch
On February 10, Grayscale Investments filed its application for the first-ever spot ADA exchange-traded fund in the US. As a result, ADA jumped 11% on Tuesday, climbing to a high of $0.82.
However, as the ETF hype wanes, ADA has begun to shed some of these gains. At press time, the ninth-largest cryptocurrency by market value trades at $0.76, noting a 4% drop in the past 24 hours.
Notably, ADA’s daily trading volume has rallied amid this value decline. It totals $1.44 billion, having climbed 48% over the past 24 hours.
When an asset’s price drops while trading volume spikes, it signals increased selling pressure, suggesting that more traders are offloading their holdings. This indicates bearish sentiment and profit-taking among ADA holders, potentially leading to further declines if selling persists.
Further, the coin’s negative Balance of Power (BoP) confirms the selloffs among market participants. At press time, this momentum indicator is at -0.54.
This indicator measures the strength of an asset’s buyers against its sellers by analyzing price movements within a given period. A negative BoP value like this indicates that sellers are in control, meaning the ADA downward pressure is strong, and the asset is likely experiencing a bearish trend.
ADA Price Prediction: Will It Hold or Fall Back to $0.53?
ADA’s double-digit surge on Tuesday propelled its price above a long-standing descending trendline. However, a retest of this breakout level could fail, with selloffs gaining momentum.
If that happens, ADA may fall to $0.70. If this level fails to hold, the coin could extend its decline toward $0.53—a level last seen on February 3.
Conversely, a surge in accumulation and improved market sentiment could fuel a rally to $0.82.
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