Cardano Price Prediction: Bullish bets on close position contracts drop, buying pressure weakens targeting $0.7228.

Cardano (ADA) continued its nearly 5% fall from the beginning of the week, trading at $0.7920 in the Asian afternoon session today (29). Despite the heightened bearish sentiment in the market in the short term, Cardano co-founder Charles Hoskinson expressed an optimistic view in a recent podcast, believing that ADA's performance could outperform Bitcoin and potentially become a layer of returns for Bitcoin (BTC).

However, both derivative products and technical data indicate that ADA will experience a continued pullback, possibly falling towards its 50-day exponential moving average (EMA).

Cardano founder is optimistic about the future of ADA

In a podcast with Blockworks co-founder Jason Yanowitz, Charles Hoskinson emphasized the limitations of Bitcoin's performance in the coming years, suggesting that Bitcoin could reach 1 million dollars, a pump of 10 times. On the other hand, Charles believes that the performance of ADA will surpass BTC, with a pump of 100 times or even 1000 times.

Based on the current market value, Bitcoin would reach 23 trillion dollars under the above scenario, while the valuation of ADA would be between 2.7 trillion dollars and 27 trillion dollars. However, given the increasing adoption of Bitcoin by institutional investors and government reserve agencies, it seems unlikely that ADA's market capitalization will exceed Bitcoin's by 1000 times.

Charles also emphasized the growing role of Bitcoin in decentralized finance (DeFi), as well as the potential of ADA to become its yield layer, thus providing avenues for staking, yield farming, and other DeFi services.

Hoskinson stated that Cardano's partner chains may provide annual airdrops for ADA holders, with the first to be launched being the Midnight (NIGHT) token. It is worth noting that out of the total supply of 24 billion NIGHT tokens, 50% will be reserved for ADA holders.

Bullish bets, ADA derivatives open interest falls

CoinGlass's data shows that the open interest (OI) for ADA is $1.51 billion, down from last week's historical high of $1.74 billion. The $230 million drop in one week reflects a significant outflow of capital, indicating that traders' interest is declining.

(Source: Coinglass)

The long-short ratio has fallen from 0.9272 in the past 24 hours to 0.8864, indicating an increase in short positions. The seller's dominance has strengthened, with short positions skyrocketing from 51.89% to 53.01%.

(Source: Coinglass)

The decrease in open positions and long positions for ADA derivatives indicates a weakening of optimistic sentiment in the event of a market pullback.

The downtrend of ADA targets the 50-day EMA

ADA has formed a continuous resistance trend line over several months, connecting the peaks from December 3rd and March 3rd.

ADA recently fell back from the trend line on July 21, also marking a failure to break through the 50% retracement level of 0.9187 USD, which is the retracement from 1.3264 USD on December 3 to 0.5110 USD on April 7. The downward trend of ADA suggests that the path of least resistance is at the 50-day EMA of 0.7228 USD.

On Sunday, the Moving Average Convergence Divergence (MACD) fell below the signal line, and the red histogram reappeared, issuing a sell signal. On the daily chart, the Relative Strength Index (RSI) reading is 54 and is falling towards the midpoint, indicating that buying pressure is weakening.

On the other hand, the reversal of ADA may test the upper resistance trend line near the 50% retracement level of $0.9187.

(Source: Trading View)