Whales have dumped around 90 million ADA since September 20.
Cardano’s native cryptocurrency posted an impressive 23% price increase over the past month and is currently trading just under $0.25.
Many analysts expect October to bring further gains, but Ali Martinez outlined several important factors that could trigger a short-term pullback.
Time to Cool Off?
The popular X user started his analysis by noting that demand for ADA in the futures market is cooling. He said open interest has declined 9% over the last week, from almost $2 billion to about $1.81 billion.
“This suggests traders are reducing leveraged exposure,” he explained.
Martinez then turned to whale activity, which should serve as a clear bearish signal. According to him, large investors have offloaded 90 million tokens (worth around $22.5 million) since September 20, adding to the recent selling pressure.
His third negative factor is the Tom DeMark Sequential indicator, which flashed a sell signal on ADA’s daily chart on September 26. Martinez noted that the asset’s valuation has plunged 10% since then and hinted that the correction may not be over yet.
Subsequently, the market observer focused on $0.24, calling it the key mid-range support. He believes that losing that level could lead to a further drop to $0.21. At the same time, holding the lower boundary could present the next buying opportunity, targeting the channel top near $0.28.
ADA’s seasonality should also be mentioned. Unlike BTC, which often thrives in October, Cardano’s native token has historically underperformed during this period, finishing in the red six times over the past nine years.
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The Bullish Scenario
Recently, Brazil’s state oil giant Petrobras reportedly tapped the Cardano blockchain to verify environmental data related to low-carbon fuels.
Several popular X users quickly reposted the development, including TMA | The Money Ape. They suggested that “Cardano real-world use case is here,” reminding that ADA skyrocketed by over 17,000% during the 2021 bull run.
Another market observer who envisioned a major rally is JAVON MARKS. Earlier this month, they said that ADA appears to have “based” just like in 2020 before a massive price increase. That said, the analyst expects another “monstrous run” and set $2.90 as a target.
