Cardano (ADA) Price Prediction: The funding rate remains negative, is the previous breakthrough pretending to be "soft"?

Cardano (ADA) may be faking weakness, with the price of ADA hovering around $0.587 for most of July after falling 12% over the past month. Despite a decline in retail investor interest, on-chain data shows a starkly different picture, as a potential bear trap is forming.

The financing rates on major platforms are still negative

Although the funding rate of ADA has stabilized above $0.58, it remains unchanged. On multiple exchanges, this indicator continues to fluctuate between neutral and negative values, which means that bears are still shorting the price of ADA.

This is usually a sign of skepticism. The public is bearish, and this is costing them. If the momentum reverses and ADA starts to rise, this setup could trigger a short squeeze, forcing leveraged sellers to buy back tokens when the price of ADA increases.

The funding rate reflects the cost of holding futures positions for the long term. A negative rate indicates that shorts are dominant, but if the trend reverses, shorts can also be easily impacted.

Net inflow on the exchange shows that funds are flowing out of the platform

Exchange net flow data shows that funds are continuously flowing out of the exchange. In other words, the amount of ADA withdrawn is greater than the amount deposited, which usually indicates that holders are transferring tokens to long-term wallets. This behavior often occurs during periods of secret accumulation.

(Source: Coinglass)

This does not guarantee that the price of ADA will rise again, but it does indicate that ADA holders are unwilling to sell at the current price level. The insufficient supply on exchanges limits the selling pressure, and as demand rises, this may exacerbate future price volatility.

The number of ADA holders continues to increase

Wallet data shows that the total number of ADA holders is steadily growing. In the past six months, the number of unique addresses has increased to 4.5 million, setting a new annual high.

(Source: Santiment)

Even though ADA has fallen from $0.90 to around $0.58, this steady growth still exists. Long-term investors are still holding, and if momentum returns, this confidence base could become a driving force. The divergence between price and wallet growth often signals a larger trend reversal.

Trading volume reached 381 billion USD within 12 months

According to data from TapTools, Cardano's trading volume exceeded $381 billion last year, making it one of the largest cryptocurrencies by trading volume in the world.

Considering the poor price performance of ADA in recent months, this figure is even more surprising.

High trading volume indicates sustained market interest, especially from traders and institutions that are not influenced by sideways price movements, which could become a catalyst for the next trend.

ADA Technical Analysis: OBV Divergence Indicates Pressure

On the chart, the ADA price is still within a descending triangle pattern, with resistance around 0.612 USD and support at 0.537 USD. Additionally, the current trading price of ADA is 0.58 USD. This pattern usually breaks downward, but ADA has not yet shown signs of a sudden weakness.

On the contrary, the balanced trading volume ( OBV ) indicator is sending early signals.

Although the price remains stable, the OBV has slightly increased, which indicates that buying pressure is present but has not pushed the price up. This is often how accumulation begins: quietly and unnoticed.

OBV tracks the trend of trading volume. When the indicator rises while the price remains stable, it indicates that demand is gradually increasing.

If ADA breaks through 0.612 USD, then there is very little resistance before 0.66 USD. However, if it falls below 0.537 USD, the structure will break downwards. Currently, investors need to continue to follow, but the data seems to favor the bulls.

(Source: Trading View)