Key takeaways
- Cardano’s ADA fell roughly 10% in the last 24 hours and is trading near $0.415.
- If the $0.40 support level holds, ADA could rebound toward the $0.50 area.
Over the past day ADA has been the weakest performer within the top 10 cryptocurrencies by market capitalization, sliding around 10% amid broader market pressure tied to the Federal Reserve’s interest-rate outlook and a noticeable drop in derivatives open interest.
Despite the recent bearish move, on-chain indicators point to renewed activity on Cardano’s network that could provide a foundation for a recovery in the near term.
Derivatives data adds to ADA’s woes
Derivatives metrics show a meaningful decline in futures activity for ADA. Data from CoinGlass reports about a 13% fall in Cardano futures open interest over the last 24 hours, bringing total OI to roughly $725.6 million. A drop of this size typically reflects a reduction in active positions—both long and short—and signals that traders are stepping back from the market.
At the same time, funding rates have eased, moving from 0.0047% on Wednesday to about 0.0019%, which aligns with a cooling of bullish conviction among leveraged traders.
Shorts represent a majority of the remaining active derivatives exposure, accounting for approximately 54.6% of positions in the last 24 hours. This skew toward short positions further underscores the current bearish sentiment surrounding ADA.
However, derivatives data does not tell the whole story. On-chain metrics paint a more mixed picture: Santiment data shows transaction volume reached a nine-month high of roughly 4.11 billion ADA on Tuesday. Higher transaction throughput can be a sign of renewed user engagement and can support price discovery over the short to medium term.
Daily active addresses on the Cardano network have also risen, hitting a four-month high of about 34,229, which indicates increased participation and interest from network users and may act as a counterweight to the derivatives-driven sell-off.
Cardano could break out above $0.50 soon
Technically, the 4-hour ADA/USD chart shows a market structure that could be poised for a shift. An MSU (Market Shift Up) pattern on this timeframe suggests the potential for a bullish reversal if support around $0.40 remains intact.
Momentum indicators are mixed. The Relative Strength Index (RSI) sits near 36, which is still in bearish territory but close to neutral, implying there is room for a rebound. The MACD has moved into slightly positive territory, hinting at a gradual shift toward bullish momentum if buying volume increases.
If momentum flips and the $0.40 support holds, ADA could attempt to rally to the near-term resistance around $0.50 within hours or days. A successful breakout above that level could extend the move toward $0.6069, a prior high reached on November 11 that would represent a more significant upside target.
Conversely, failure to defend current levels could expose ADA to further downside pressure. In that scenario, a retest of the December 1 low near $0.3707 would be a plausible next step as sellers test lower support.
In summary, Cardano’s recent price drop reflects a risk-off tilt in derivatives markets, but rising on-chain activity and improving short-term technicals suggest a recovery remains possible if key support holds. Traders should watch open interest, funding rates, active address trends, and the $0.40 support level for clues about the next directional move.