Cardano (ADA) holds the important support zone, on-chain bounce back signals are gradually appearing.

Cardano (ADA) is currently fluctuating steadily around the important support zone of 0.45 USD during Tuesday's trading session, after falling nearly 4% the previous day. Although it just went through a corrective phase, signals from on-chain data and the derivatives market indicate signs of an early recovery, as the MVRV ratio shows that ADA is being priced at a low price and the funding rate has shifted to a positive state. Technically, if the price continues to hold above the 0.45 USD mark, ADA may be ready to enter a short term recovery.

On-chain indicators suggest that ADA may be undervalued.

The Market Value to Realized Value indicator (MVRV) from Santiment — a tool for measuring the valuation level of an asset over different time frames — currently shows that Cardano is in a state of being undervalued. Specifically, the 30-day and 7-day MVRV are at negative 20.47% and 13.44%, respectively, reflecting that most short-term and medium-term investors are holding ADA at a loss.

Such deep negative MVRV levels are often viewed as potential buy signals, as in the past, when the indicator declined to similar zones, the market often witnessed a bottom-fishing flow of funds and ADA prices quickly recovered.

MVRV chart for 7 days and 30 days of Cardano | Source: SantimentNot only the valuation factor, but also derivative data is reinforcing the recovery expectations for Cardano. According to the Funding rate statistics from Coinglass, the number of traders betting on the possibility of a deep ADA fall is no longer dominant. The Funding rate has shifted to a positive level, reaching 0.0060% on Tuesday, indicating that the Long side currently has to pay fees to the Short side.

History shows that whenever the funding rate reverses from negative to positive, Cardano often records significant upward movements — a signal that traders are closely monitoring.

Funding rate chart of Cardano | Source: Coinglass## Cardano price forecast: ADA finds support around the important zone

The price of Cardano (ADA) broke through the key support level of 0.49 USD on Sunday, leading to a nearly 8% fall the next day. By Tuesday, ADA is attempting to hold its position just above the important support zone of 0.45 USD.

If the 0.45 USD mark continues to hold, this coin may extend its rebound and return to challenge the resistance zone of 0.49 USD. A decisive candle close above this zone will open up opportunities for ADA to aim for the 50-day EMA around the level of 0.62 USD.

Daily chart ADA/USDT | Source: TradingViewThe RSI indicator is currently hovering around the level of 28 — strong oversold zone — indicating that the downward pressure is showing signs of slowing down. However, for a truly sustainable recovery, the RSI needs to break back above the neutral zone.

Conversely, if ADA closes below 0.45 USD, the downtrend may continue to expand, bringing the price back to test the key psychological zone of 0.40 USD.

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