Recent Price Action and Bearish Momentum
Cardano (ADA) has recently experienced a significant downturn, with its price declining by over 10% in the past week. After starting near $0.30, ADA faced heavy selling pressure that drove it down to $0.23 before consolidating around $0.26. This drop highlights a bearish trend currently dominating the market.
Major Shifts in Derivatives Market
The decline in price is closely tied to notable changes in the derivatives market, where open interest in ADA has plummeted from $1.6 billion to approximately $334 million. This sharp reduction indicates that leveraged traders are exiting their positions in large numbers, closing rather than rolling over their contracts.
Moreover, the distribution of open interest across exchanges has shifted dramatically. In 2023, Binance held over 80% of ADA’s open interest. By 2026, that share has dropped to 22%, with Gate.io now leading at 31%. This increased fragmentation may limit ADA’s upside potential, as concentrated leverage on a single exchange often fuels strong rallies in altcoins.
Technical Levels and Long-Term Perspective
Despite the bearish short-term sentiment, some analysts maintain a long-term bullish outlook for Cardano. They argue that as long as ADA doesn’t close below $0.13 on a weekly timeframe, the positive structure remains intact. For confirmation of a new uptrend, ADA would need to reclaim the $0.44 level. Doing so could signal the start of a new bull cycle, reminiscent of previous price surges, with long-term targets ranging from $1.20 to possibly above $10.
Bottom Line
While Cardano currently faces significant bearish pressure and a dramatic shift in the derivatives market, the longer-term outlook remains cautiously optimistic. Investors should keep a close watch on key support and resistance levels, as well as shifts in open interest distribution, to assess ADA’s future trajectory.
