Cardano faces fresh selling pressure as ADA drops below $0.26

The bearish performance comes as weakening on-chain activity and mixed derivatives data reinforced a cautious outlook for the cryptocurrency.

Bearish derivatives positioning limits $ADA recovery

Derivatives data from CoinGlass showed mixed sentiment among Cardano traders, keeping recovery expectations subdued.

Cardano’s long-to-short ratio dropped to 0.54 on Monday, marking its lowest level in more than a month.

A ratio below 1 indicates bearish positioning dominates the market, with traders increasingly betting on further downside for $ADA.

However, funding rate data offered a slightly more constructive signal.

CoinGlass’ Open Interest-weighted funding rate for Cardano turned positive on Sunday and reads 0.0078% on Monday.

Positive funding rates indicate long traders are paying shorts to maintain positions, reflecting mild bullish sentiment despite broader weakness.

The conflicting derivatives data suggest uncertainty among traders and a lack of strong conviction in either direction, reducing the probability of a sustained rebound in the near term.

In addition to that, on-chain data from Santiment further supports the bearish outlook for Cardano.

Santiment’s Social Dominance metric, which measures the share of online crypto discussions related to $ADA, has continued to trend lower and currently sits at 0.009 — its lowest level in more than a year.

The decline suggests fading market attention and weakening sentiment around the Cardano ecosystem.

Network activity has also declined steadily over recent weeks.

Santiment’s Daily Active Addresses metric, which tracks the number of active wallets interacting with the blockchain, fell to 12,800 on Monday after declining consistently over the past month.

The slowdown in network participation suggests weakening demand for Cardano’s blockchain usage, a trend that historically correlates with softer price performance.

Cardano technical outlook: Bears remain in control

The $ADA/USD 4-hour chart is bearish as Cardano is trading below all major Exponential Moving Averages (EMAs).

$ADA is currently trading below the 50-day EMA at $0.259, the 100-day EMA at $0.281, and the 200-day EMA at $0.358, indicating persistent downside pressure across multiple timeframes.

The failed recovery attempt week means that Cardano is now consolidating just above former trendline resistance-turned-support near the $0.238 level.

Momentum indicators also continue to favor sellers. The Relative Strength Index (RSI) hovers near 35, signaling an oversold momentum.

Meanwhile, the Moving Average Convergence Divergence (MACD) remains below the zero line, reinforcing the bearish bias.

If the rally resumes, the bulls would encounter the first major resistance zone near the 50-day EMA around $0.259.

A daily close above this level would see a stronger resistance level emerge at the 100-day EMA at $0.281.

Beyond that, additional resistance levels are located at the 38.2% Fibonacci retracement near $0.321, the 50% retracement around $0.352, and the 200-day EMA at $0.358.

However, if the selloff continues, immediate support rests near the $0.238 trendline breakout level, followed by a horizontal support floor around $0.235.

A decisive breakdown below those levels could expose Cardano’s cycle low near $0.220, potentially opening the door for a deeper correction.