Cardano stalls below $0.30 as traders pile into shorts, MVRV signals possible buying opportunity
Cardano (ADA) has struggled to mount a recovery amid heightened crypto market volatility, lingering under the $0.30 mark as bearish sentiment strengthens. Over recent weeks ADA’s sideways action has pushed more traders to bet on further downside rather than an upside reversal.
Data from market intelligence firm Santiment shows weekly shorting activity on ADA has climbed to multi-year highs. On Binance — the world’s largest crypto exchange — funding rates now reflect the highest ratio of short positions to longs since June 2023, signaling that an increasing number of traders expect ADA to fall in the short-to-medium term. Rising short interest and skewed funding rates often reflect market caution and can add selling pressure, though historically extreme positioning has also preceded reversals when the crowd is most one-sided.
At the same time, Cardano’s 365-day MVRV (Market Value to Realized Value) has plunged to about -43%, according to Santiment. That means the average address active over the past year is holding an unrealized loss of roughly 43% — a level typically interpreted as a “buy or opportunity” zone. ADA’s price has dropped more than 71% since September of last year, and severely negative MVRV readings have in past cycles marked periods when a market bottom may be forming as average returns converge toward zero.
The mixed signals — rising short interest versus historically low MVRV — create two plausible near-term scenarios: continued downside as shorts exert pressure, or a short squeeze that forces a rapid bounce if bearish positioning becomes overcrowded. Some experienced traders view the present discomfort among retail holders as an attractive risk-reward entry point, while others remain cautious.
Notably, the SEC’s recent move to classify Cardano among certain crypto assets as commodities rather than securities has not yet sparked a meaningful return of bullish momentum. For now, traders will be watching funding rates, on-chain metrics like MVRV, and order-flow for clues on whether current bearish bets will deepen the decline or set the stage for an abrupt recovery.
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