Cardano Bears Tighten Grip as ADA Eyes $0.50 Breakdown

The price of Cardano has dropped 3% as it tests key support. With rising liquidations and weakening derivatives sentiment, will ADA plunge to $0.50?

Cardano faces the risk of breaking down from a crucial support trendline after falling over 3% on Tuesday. Could this drop push ADA to the psychological $0.50 level? Let’s explore.

Cardano Price Analysis Warns of Wedge Breakdown

On the daily chart, Cardano shows a bearish reversal from a long-standing resistance trendline, leading to a pullback of over 15% in the past week. At the time of writing, ADA trades at $0.61 with a modest intraday recovery of over 0.5%.

Amid the ongoing downtrend, Cardano is now testing a critical local support trendline, as bulls struggle to absorb increasing selling pressure. The current price action reveals a wedge pattern formed by converging trendlines.

While the trend suggests a possible bearish continuation, technical indicators are giving mixed signals. The MACD and signal lines remain in a downtrend, whereas the daily RSI shows a minor bullish divergence.

If selling pressure persists, a decisive close below the support trendline could extend Cardano’s decline toward the psychological $0.50 mark. However, a rebound could see ADA retest immediate resistance near the overhead trendline at $0.68.

Cardano Derivatives Traders Hold Bearish Bias

Meanwhile, optimism in Cardano’s derivatives market continues to fade as downside risks increase. According to Coinglass data, Cardano’s open interest has declined by 1.95%, falling to $731.21 million.

Adding to the bearish sentiment, long liquidations over the past 24 hours reached $2.38 million, substantially higher than the $93,330 in short liquidations.

This imbalance has pushed the 24-hour long-to-short ratio down to 0.9175, indicating a larger proportion of active selling positions. With bearish dominance evident in the Cardano derivatives market, traders appear to be bracing for a deeper correction.