- Cryptocurrency analyst Fiery Trading predicts that Cardano’s ADA could surge to $40 based on its current trading channel, despite inherent risks.
- Increased short positions on ADA and XRP might lead to a potential price rally as liquidated shorts could drive prices higher.
The cryptocurrency market is no stranger to dramatic price shifts, and according to recent analyses, Cardano’s native token, ADA, could be on the verge of an explosive rise. Based on a technical analysis pattern, ADA could surge to $40 or even higher, heralding a potential all-time high for the cryptocurrency.
Cryptocurrency analyst Fiery Trading shared a bold prediction on TradingView, suggesting that ADA’s price could soon bounce to unprecedented levels if it continues to trade within its current channel. The analyst pointed out that while this outcome is not guaranteed, the potential return ratio makes it “worth the risk.” Fiery Trading emphasized that current price levels might offer investors the best opportunity to enter ADA for the foreseeable future.
Short Sellers Bet Against ADA and XRP
This optimistic forecast for ADA comes at a time when short sellers are increasingly betting against both ADA and the native token of the XRP Ledger, XRP. According to on-chain analytics firm Santiment, the funding rates on cryptocurrency exchange Binance have shown a dominance of short positions over longs since September 2023 for ADA and May 2024 for XRP. This trend suggests that some investors expect a price decline, yet paradoxically, it could spell good news for long-term investors.
Short selling involves borrowing an asset, selling it, and later repurchasing it at a lower price to pocket the difference. When short positions are liquidated, it can trigger a price increase as traders rush to buy back the asset, potentially propelling prices upwards. This dynamic can create a positive feedback loop, particularly if a significant number of short positions are liquidated simultaneously.
Investors are eagerly watching the cryptocurrency market for signs of revival, with ADA and XRP being two altcoins that have seen a rise in short positions following recent price upticks. The increased short activity might indicate a looming price rally, as liquidated shorts could help drive prices higher.
While the future of ADA’s price remains uncertain, the combination of technical analysis and market dynamics suggests that the cryptocurrency could be poised for a significant surge. As always, investors should exercise caution and conduct their own research, but the potential for ADA to reach $40 presents an exciting opportunity for those willing to take the risk.
