- Cardano struggles after rejecting the 50-day EMA, with retail interest and bullish momentum declining.
- Key support at $0.3826 is at risk, and a breach could push ADA toward $0.3294.
Cardano fails to reclaim a key technical level, reinforcing a cautious short-term outlook. ADA slipped more than 3% on Thursday, extending losses after a second rejection from the 50-day Exponential Moving Average earlier this month. This move has placed Cardano back near critical support, with derivatives data and technical signals pointing to fading upside strength.
After briefly attempting to stabilize, ADA has struggled to attract sustained buying interest. The rejection near the 50-day EMA has acted as a technical ceiling, keeping sellers firmly in control as broader market sentiment turns defensive.
Retail Interest Weakens as Derivatives Data Turns Bearish
Cardano’s recent decline coincides with a clear reduction in retail participation. According to derivatives data, ADA Open Interest dropped by 2.70% over the past 24 hours to approximately $826 million. This decline signals capital exiting the market, often associated with traders scaling back risk exposure.
Liquidation data further supports this view. Over the same period, long positions worth about $1.29 million were wiped out, far exceeding short liquidations. This imbalance highlights how bullish traders bore the brunt of the pullback, reinforcing the prevailing bearish bias.
Funding rates also slipped sharply, falling to around 0.0004% from earlier intraday highs. Lower funding rates suggest reduced demand for leveraged long positions, aligning with the spike in long liquidations and the broader cooling of speculative interest.
Technical Structure Points to Key Support Test
From a chart perspective, Cardano has failed to sustain a breakout above a descending trendline that connects the October and December highs. The 50-day EMA near $0.4158 continues to cap recovery attempts, forcing price action back toward the lower end of its short-term range.
Immediate focus now rests on the $0.3826 support level, marked by the January 3 low. A daily close below this zone could open the door to a deeper pullback toward the December 31 low near $0.3294.
Technical indicators reflect this fragile setup. The MACD histogram remains above zero but is shrinking, indicating diminishing buying pressure. The Relative Strength Index sits near 52, a neutral reading that aligns with ongoing consolidation rather than a clear reversal.
If ADA manages to defend $0.3826, recovery attempts could resume, potentially targeting another test of the 50-day EMA. Failure to hold that support, however, would likely tighten the bearish grip on Cardano’s short-term price action.
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