Cardano continued its upward movement on Thursday, widening its weekly gains to roughly 13%. This follows a surge of 30% during the previous week, which had propelled the ADA token above the $0.20 mark.
Derivatives data point to waning trader confidence
Despite this recent rally, indicators from the Cardano derivatives market highlight a decline in bullish sentiment among retail traders. ADA futures have seen shrinking activity, with Open Interest falling by nearly 2% in the past 24 hours to $494.17 million, according to CoinGlass. The reduction signals that traders are either closing out positions or have been liquidated from leveraged trades.
Long liquidations on ADA futures reached $983,670 during this period, significantly outweighing short liquidations, which totaled $103,370. This suggests that bullish investors faced greater losses as the price pulled back.
Long traders endured considerably higher liquidations compared with their short counterparts, revealing that most of the recent losses affected bullish positions as Cardano’s price declined.
Cardano’s Open Interest-weighted funding rate has slipped to -0.0019%. When funding rates are negative, traders holding short positions pay a fee to those holding long positions. This scenario often points to increased bearish sentiment as more traders expect further downside.
ETH
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AAPLThe backdrop of declining Open Interest, heightened long liquidations, and the shift to negative funding rates signal caution among retail traders, who appear less convinced of ADA’s ability to stage an immediate recovery.
Mini dictionary: Open Interest — The total number of open futures or options contracts that exist on a given asset at a particular time. A decline in Open Interest often reflects reduced market participation or the unwinding of existing positions.
Technical hurdles and key levels
Cardano’s momentum has slowed under technical resistance at the 200-day Exponential Moving Average (EMA), which is currently positioned around $0.2483. The previous week’s rally failed to close above this benchmark, as an overhead descending trend line near $0.2333 further restrained upward movement during weekend trading.
Broader weakness across major cryptocurrencies has also contributed to ADA’s pullback. Bitcoin recently slipped toward the $78,000 mark after briefly touching $80,000, and top altcoins including Ethereum, Solana, and XRP have also reversed lower as part of the general market retracement.
ADA has since retreated and now trends toward the 50-day EMA, currently at $0.1898. This zone is seen as a crucial support threshold for the token.
| Level | Price | Significance |
|---|---|---|
| 200-day EMA | $0.2483 | Primary resistance |
| 50-day EMA | $0.1898 | Immediate support |
| Key trendline | $0.1705 | Critical support if 50-day EMA breaks |
Technical indicators reinforce the fragile outlook. The Relative Strength Index (RSI) has dropped to 52 after previously reaching overbought conditions. While the RSI remains above the neutral 50 level, its downward trend points to moderating bullish momentum.
The Moving Average Convergence Divergence (MACD) indicator and its signal line are both still above zero, but have begun to flatten. Shrinking histogram bars further highlight a gradual loss of buyer dominance.
If ADA closes decisively below the 50-day EMA, a deeper correction could unfold, potentially testing the rising trendline near $0.1705. This area will be closely watched as it may determine whether Cardano sustains its broader recovery pattern or continues to weaken.
Targets for recovery and outlook
To revive bullish sentiment, Cardano needs to secure a close above the 200-day EMA and overcome both technical and psychological barriers. A confirmed breakout at this level could set the stage for a move towards the recent high of $0.3050, reached in early February.
Traders eye the 200-day EMA at $0.2483 as a crucial hurdle for ADA; a breakout above this resistance would likely open doors for a renewed recovery.
