Key highlights:
- Cardano’s 365-day MVRV hits -43%, signaling average holders are deeply underwater and historically marking opportunity zones
- Binance funding rate shows largest ratio of shorts to longs since June 2023, a rare bottom signal
- Extreme bearish positioning could set up a short squeeze if sentiment shifts
Cardano is doing that thing again where the crowd gets overwhelmingly bearish right when it probably shouldn’t. Santiment just dropped some data that makes you stop and pay attention.
The average wallet that’s been active on Cardano over the past year is sitting on a 43% loss. The ADA price has been in the trenches for months, down 71% from its September highs. And now, on top of all that pain, traders are piling into shorts like it’s going out of style.
What the ADA chart is showing
The Santiment chart lays it out pretty clearly. There’s a line marking the “opportunity” zone where MVRV is below average, and right now, ADA is way below that line. The funding rate chart shows the spike in shorting, the largest in three years. It’s the kind of setup that usually precedes a bounce.
The ADA price is currently sitting around $0.26, and the chart suggests that the risk-reward is starting to tilt in favor of buyers. Not because the chart says so, but because the crowd is positioned the wrong way.
The Cardano MVRV signal that matters and the shorting frenzy
The 365-day MVRV is sitting at negative 43%. That’s the lowest it’s been in a long time. Santiment points out that in a zero-sum market, when average returns are severely negative, it usually signals a looming turnaround. Coins always trend toward 0% on MVRV over time. So when the average is this far below zero, the probability of a rebound starts to look pretty good.
This isn’t some obscure indicator. It’s basically measuring how underwater the average holder is. And right now, the average Cardano holder is drowning. That’s usually when the smart money starts sniffing around.
Here’s the other piece that makes this setup interesting. The funding rate on Binance is showing the largest ratio of shorts to longs since June 2023. That’s the highest level since June 2023. Traders are betting that the ADA price is going to keep falling.
History says that’s often the wrong trade. When funding rates get this skewed, the market tends to liquidate the overleveraged side. Shorts get squeezed, and the price moves in the direction nobody was expecting. Santiment literally calls this a “bottom signal.” That’s not hype. It’s just how markets work when the crowd gets too comfortable betting on more downside.
What comes next for ADA
No one can promise a bottom. Markets can stay irrational longer than anyone expects. But when you see the 365-day MVRV at 43% negative and funding rates hitting three-year highs on the short side, it’s worth paying attention. These are the kinds of signals that usually show up before a trend change, not after.
The ADA price could still grind lower; it always can. But the data indicates the selling pressure might be running out of steam. CoinCodex’s 1-month ADA price prediction places the token at $0.3680, indicating a modest rebound from current levels near $0.26 if the extreme negative MVRV and shorting frenzy trigger a squeeze.
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Source: https://coincodex.com/article/83256/cardano-price-prediction-ada-flashes-rare-bottom-signal-as-shorting-hits-3-year-high/
