Cardano (ADA), the native cryptocurrency of the Cardano blockchain, has been making headlines despite a recent decline in its price. Although the altcoin has experienced a significant drop of more than 30% in the past 48 hours, rising interest from long-term holders and increased participation from traders suggest that a price rebound may be on the horizon.

ADA Sees $164 Million Outflow

A major development came to light on December 20, 2024, when Coinglass’s on-chain metrics revealed that Cardano saw a notable outflow of $163.85 million worth of ADA in just the past week. This occurred despite the continued decline in the altcoin’s price. Outflows from exchanges typically indicate that assets are being moved into long-term holders’ wallets, which often signals an impending upward momentum in the market.

In the world of cryptocurrency, “outflow” refers to the movement of digital assets from exchanges into private wallets. This shift suggests that investors are looking to hold their assets long-term rather than sell them on exchanges. Historically, such movements have correlated with increased buying pressure, which can lead to higher prices.

Why the Outflow Matters

When large amounts of ADA are withdrawn from exchanges, it reduces the available supply in the market. As the supply decreases, the potential for upward price pressure increases. This situation may signal a buying opportunity for traders who believe that the current price decline is temporary and that ADA could soon rebound.

This is a crucial time for Cardano, as the token is at a price level where long-term holders may see an opportunity to accumulate more, while traders are keeping a close eye on any potential signs of recovery. The current outflows suggest that more investors may be adopting a “buy and hold” strategy, hoping for ADA’s price to rise again in the coming weeks.

Increasing Trader Interest

Apart from the growing interest from long-term holders, traders are also becoming more engaged with Cardano. According to data from Coinglass, ADA futures open interest has seen a 4.5% increase in just the past few hours, reflecting a shift in traders’ sentiment. As the price of ADA starts to stabilize, traders are becoming more active, indicating a potential for increased market participation.

Moreover, Cardano’s trading volume surged by 32% in the last 24 hours, signaling heightened activity as investors take advantage of price fluctuations. This uptick in volume, combined with the increasing futures interest, suggests that the market may be preparing for a shift back into positive territory for ADA.

ADA’s Technical Outlook

From a technical analysis standpoint, Cardano has successfully retested a key support level of $0.80, which it reached during a recent market dip. The ability to hold above this level is crucial for the potential of a price rebound. If ADA manages to stay above $0.80, technical indicators suggest that it could rise by as much as 40%, reaching a price target of $1.23 in the coming days.

Currently trading around $0.887, ADA faces a critical moment. If the current momentum from traders and long-term holders continues to build, Cardano could see a significant rally. However, if selling pressure persists, it may struggle to hold above the $0.80 support level, and a further decline could be imminent.

What’s Next for Cardano?

While ADA’s short-term price movements remain volatile, the growing outflows and increased interest from both long-term holders and traders suggest that Cardano could be setting up for a significant rebound. As more ADA is taken off exchanges, buying pressure may increase, which could push the price higher in the coming weeks.

For those watching the Cardano market, the key levels to monitor are the $0.80 support and the $1.23 resistance. A sustained price above $0.80 could signal a strong recovery, while any drop below this level would raise concerns for a more prolonged decline.

In conclusion, Cardano’s current market dynamics, with significant outflows and increasing interest from traders, point to a potential buy opportunity. As always, investors should remain cautious and closely follow market indicators for any signs of a trend reversal.