Cardano hit by fear from Iran, will it overcome short-selling bombardment and break through $0.26?

▲ Cardano (ADA)/AI Generated Image ©

As the risk of an all-out war in the Middle East escalates and fear spreads across the cryptocurrency market, Cardano's price is battling a tough resistance breakout, facing intense bombardment from short-selling forces.

According to investment media outlet FXStreet on April 20 (local time), Cardano (ADA) price attempted a slight rebound of 2.67% last week, but it encountered geopolitical headwinds and is currently stalled around $0.245. This is because the macroeconomic shockwave of the armed conflict between the US and Iran in the Strait of Hormuz, which emerged over the weekend, stimulated risk-averse sentiment across the entire asset market.

Market instability immediately manifested as a deterioration in derivatives indicators. According to CoinGlass data, Cardano's long/short ratio fell to 0.74, its lowest in the past month. A ratio below 1 is a clear bearish signal, indicating that short-selling investors betting on future asset price declines are dominating the market.

The open interest weighted funding rate also supports a negative outlook. The funding rate, which turned negative on Sunday, currently stands at -0.0061% on Monday. This indicates that market pessimism is so prevalent that short position holders are willing to pay long position holders to maintain their sell bets, acting as heavy pressure hindering short-term price recovery.

Even with technical analysis, the momentum for a rebound is weakened. The current price is trapped below the 50-day, 100-day, and 200-day exponential moving averages (EMA) of $0.260, $0.298, and $0.393, respectively. The daily Relative Strength Index (RSI) hovers around 46, indicating a lack of buying interest, and while the Moving Average Convergence Divergence (MACD) is in positive territory, buying pressure remains negligible.

In the short term, breaking the $0.245 resistance is necessary to attempt a rebound towards $0.260 and $0.269 (Fibonacci 23.6%). For a full trend reversal, a breakthrough of the $0.298 zone, where multiple resistances are concentrated, is essential. Conversely, in case of a decline, $0.220 is a critical defense line, and if this level breaks, there is a high risk of a deeper correction, the media analyzed.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*