Cardano may be flashing the kind of contrarian setup that traders tend to 
watch closely near exhausted selloffs. According to on-chain and derivatives 
data shared by Santiment, ADA’s 365-day MVRV has fallen to -43% while Binance 
funding shows the highest imbalance toward shorts since June 2023, a 
combination the analytics firm argues has historically aligned with bottoming 
conditions. Is The Cardano (ADA) Bottom Near? Santiment’s core thesis is that 
Cardano holders who have been active over the past year are now deeply 
underwater, which changes the risk-reward profile for new buyers. “Average 
wallets that have been active on the Cardano network over the past year are 
netting a return of -43% on their investments,” the firm wrote on X. “Memes 
aside about the altcoin’s major -71% price decline since September, this 
extreme negative MVRV value is generally an indicator of $ADA being in an 
‘opportunity’ or ‘buy’ zone.” Related Reading: Cardano Chop Nearing End? 
Here’s The Key Resistance To Watch That argument rests on how Santiment 
interprets MVRV, or the gap between market value and realized value, across a 
365-day window. In its framing, when the average participant is sitting on 
severe unrealized losses, downside risk begins to compress because weaker 
positioning has already been flushed out. The chart shared by the firm marks 
sub-zero MVRV territory as an “opportunity” zone and places ADA’s current 
reading well inside it. Santiment pushed that point further with a more 
explicit contrarian read. “In a zero-sum game, when average returns are 
severely negative, this is an indication of a looming turnaround with coins 
always averaging 0% on MVRV’s (average trading returns) across any timeframe. 
So when other traders are in severe pain, key stakeholders and professional 
traders are intrigued by this due to the lowered risk of buying or adding on 
to their positions.” That does not mean a rebound is guaranteed, but it does 
clarify the logic behind the call. The signal is less about immediate momentum 
and more about market structure: if most recent participants are already 
trapped at a loss, marginal selling pressure can start to weaken while value- 
focused buyers step in. Related Reading: Cardano Could Rocket 1,000% From 
Extended Accumulation Area, Analyst Says The second piece of the setup comes 
from the perpetual futures market. Santiment said Cardano’s funding rate on 
Binance is now showing the largest ratio of shorts to longs since June 2023, 
indicating that traders are leaning heavily toward further downside. In 
crowded positioning regimes, that can matter as much as the spot chart itself. 
“Cardano’s funding rate on Binance is seeing the largest ratio of shorts 
(compared to longs) since June, 2023,” Santiment wrote. “Traders are clearly 
expecting that the #12 market cap will continue to decline in value. This 
historically is another bottom signal, as funding rates are always prone to 
liquidate and send prices in the direction that traders are expecting the 
least.” That last point is the real crux of the analysis. Santiment is not 
simply saying ADA looks cheap after a 71% slide since September. It is arguing 
that Cardano now sits at the intersection of two classic reversal ingredients: 
deeply negative holder returns and an overcrowded bearish derivatives trade. 
At press time, ADA traded at $0.2666. Featured image created with DALL.E, 
chart from TradingView.com

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