Convergence

Cardano

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Divergence

<ul>
 <li>Cardano’s funding rate has been reduced to its lowest in weeks.</li>
 <li>ADA returns to the $0.5 price range after a significant decline.</li>
</ul>
Just four days into the year, <a href="https://ambcrypto.com/search/cardano" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="internal">Cardano [ADA]</a> experienced volatile price fluctuations on two days. Has this price movement been sufficient to shift sentiment from positive to negative?
<h4>Cardano suffers more setbacks in price trends</h4>
<a href="https://ambcrypto.com/how-will-cardano-fare-in-2024/" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="internal">Cardano</a> had a promising start to 2024, with a more than 5% surge on 1st January, reaching a trading value of over $0.6. However, this gain was quickly lost in the subsequent days. 
A detailed analysis of the daily timeframe chart revealed a loss of over 2.9% on 2nd January and nearly 8% on 3rd January. The setback on 2nd January was attributed to the recent overall market decline.&nbsp;
<div id="attachment_362073" style="width: 100%" class="wp-caption aligncenter"><a href="https://statics.ambcrypto.com/wp-content/uploads/2024/01/ADAUSD_2024-01-04_11-15-05.png" data-wpel-link="internal" rel="noopener noreferrer nofollow"><img aria-describedby="caption-attachment-362073" decoding="async" class="wp-image-362073 size-full" src="https://statics.ambcrypto.com/wp-content/uploads/2024/01/ADAUSD_2024-01-04_11-15-05.png" alt="ADA/USD price trend" width="1491" height="785" srcset="https://statics.ambcrypto.com/wp-content/uploads/2024/01/ADAUSD_2024-01-04_11-15-05.png 1491w, https://statics.ambcrypto.com/wp-content/uploads/2024/01/ADAUSD_2024-01-04_11-15-05-300x158.png 300w, https://statics.ambcrypto.com/wp-content/uploads/2024/01/ADAUSD_2024-01-04_11-15-05-1024x539.png 1024w, https://statics.ambcrypto.com/wp-content/uploads/2024/01/ADAUSD_2024-01-04_11-15-05-768x404.png 768w" sizes="(max-width: 1491px) 100vw, 1491px"></a>
 Source: Trading View
</div>
The Moving Average Convergence Divergence (MACD) indicated a bear trend for ADA, consistently below zero. Meanwhile, the Relative Strength Index (RSI) initially remained above the neutral line. 
However, with the recent decline in price, both the RSI and MACD now indicate a bearish trend. At the time of this update, the RSI had dipped below the neutral line, albeit marginally. 
Additionally, ADA was trading around $0.56, reflecting a modest 1.6% increase.
<h4>Cardano volume shows sell-off</h4>
An examination of the volume chart on Santiment showed significant activity amid the price fluctuations. Around 1st January, the volume was around $400 million, rising to over $1 billion by 3rd January. 
As of the latest update, the volume has reached almost $1.2 billion.&nbsp;
<div id="attachment_362075" style="width: 100%" class="wp-caption aligncenter"><a href="https://statics.ambcrypto.com/wp-content/uploads/2024/01/Cardano-ADA-11.54.01-04-Jan-2024.png" data-wpel-link="internal" rel="noopener noreferrer nofollow"><img aria-describedby="caption-attachment-362075" decoding="async" class="wp-image-362075 size-full" src="https://statics.ambcrypto.com/wp-content/uploads/2024/01/Cardano-ADA-11.54.01-04-Jan-2024.png" alt="Cardano volume" width="2560" height="867" srcset="https://statics.ambcrypto.com/wp-content/uploads/2024/01/Cardano-ADA-11.54.01-04-Jan-2024.png 2560w, https://statics.ambcrypto.com/wp-content/uploads/2024/01/Cardano-ADA-11.54.01-04-Jan-2024-300x102.png 300w, https://statics.ambcrypto.com/wp-content/uploads/2024/01/Cardano-ADA-11.54.01-04-Jan-2024-1024x347.png 1024w, https://statics.ambcrypto.com/wp-content/uploads/2024/01/Cardano-ADA-11.54.01-04-Jan-2024-768x260.png 768w, https://statics.ambcrypto.com/wp-content/uploads/2024/01/Cardano-ADA-11.54.01-04-Jan-2024-1536x520.png 1536w, https://statics.ambcrypto.com/wp-content/uploads/2024/01/Cardano-ADA-11.54.01-04-Jan-2024-2048x693.png 2048w" sizes="(max-width: 2560px) 100vw, 2560px"></a>
 Source: Santiment
</div>
The volume trend indicates a notable increase in <a href="https://ambcrypto.com/cardano-what-high-development-activity-tells-us-about-the-network/" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="internal">ADA</a> sales over the last two days, suggesting a sell-off. This conclusion is drawn from the correlation between the direction of the price and the increasing volume. 
If the price had risen with the volume, it would have signaled an accumulation trend instead.
<h4>Breaks pump on positive ADA sentiments</h4>
An analysis of the <a href="https://ambcrypto.com/cardano-is-this-the-start-of-a-new-rally/" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="internal">Cardano</a> funding rate showed that, despite price fluctuations, it has consistently remained positive. 
On 2nd January, the funding rate on <a href="https://www.coinglass.com/currencies/ADA" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="external">Coinglass</a> was around 0.07%. This signified that most traders were optimistic about a potential price increase despite the ongoing decline.
<div id="attachment_362076" style="width: 100%" class="wp-caption aligncenter"><a href="https://statics.ambcrypto.com/wp-content/uploads/2024/01/download.png" data-wpel-link="internal" rel="noopener noreferrer nofollow"><img aria-describedby="caption-attachment-362076" decoding="async" class="wp-image-362076 size-full" src="https://statics.ambcrypto.com/wp-content/uploads/2024/01/download.png" alt="Cardano funding rate" width="1852" height="525" srcset="https://statics.ambcrypto.com/wp-content/uploads/2024/01/download.png 1852w, https://statics.ambcrypto.com/wp-content/uploads/2024/01/download-300x85.png 300w, https://statics.ambcrypto.com/wp-content/uploads/2024/01/download-1024x290.png 1024w, https://statics.ambcrypto.com/wp-content/uploads/2024/01/download-768x218.png 768w, https://statics.ambcrypto.com/wp-content/uploads/2024/01/download-1536x435.png 1536w" sizes="(max-width: 1852px) 100vw, 1852px"></a>
 Source: Coinglass
</div>
How much are <a href="https://ambcrypto.com/convert/1-ada-to-usd" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="internal">1,10,100 ADAs worth</a> today
However, the substantial price decrease impacted this sentiment, leading to a decline in the funding rate to around 0.03% on 3rd January. 
As of the latest update, the funding rate has further decreased to about 0.009%. This suggests that while a positive sentiment persists, there has been a noticeable reduction in optimism among traders.

Cardano loses New Year gains – What next for ADA?

AMBCrypto

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