Cardano (ADA) price signal that once preceded a 300% rally is back

Two historically contrarian indicators are flashing simultaneously for Cardano (ADA): the 365-day Market Value to Realized Value (MVRV) ratio has fallen to -43%, placing average holders from the past year deep in loss and into Santiment's "opportunity zone." Concurrently, the weekly average funding rate on Binance futures has hit its most negative level since June 2023, indicating extreme bearish positioning in the derivatives market. Historically, the alignment of these two signals has preceded significant price recoveries; specifically, the last clear alignment in mid-2023 preceded an approximate 300% rally in ADA over the subsequent 18 months. This setup suggests that positioning is ripe for a short squeeze, where a positive price move could trigger liquidations among dominant short sellers, pushing the price higher. However, the article cautions that this is a signal based on positioning, not fundamentals, noting that ADA is down significantly from its September peak, and the broader market faces macroeconomic headwinds. Nevertheless, the current setup indicates that the next major price move is likely to catch the majority of market participants off guard.

(Source：CoinDesk)