Cardano (ADA) is trading slightly higher on Thursday, extending its weekly advance to roughly 13%, but the momentum that drove a 30% surge last week appears to be fading. Derivatives data and technical indicators suggest the token may be headed for a retest of key support near $0.19.
Futures market shows weakening demand
Data from CoinGlass reveals that ADA futures open interest has contracted by nearly 2% over the past 24 hours, now standing at $494.17 million. This decline indicates that traders are either closing positions or being forced out of leveraged bets, a sign of reduced conviction in the recent rally.
Long liquidations have outpaced shorts significantly, with $983,670 in long positions wiped out versus just $103,370 in short liquidations during the same period. This imbalance suggests that bullish traders bore the brunt of the latest pullback.
Adding to the bearish picture, ADA's open interest-weighted funding rate has slipped to -0.0019%. A negative funding rate means short sellers are paying longs to maintain their positions, reflecting growing bearish sentiment among derivatives participants.
The combination of declining open interest, negative funding, and heavy long liquidations points to a deterioration in retail demand for ADA futures, casting doubt on the sustainability of the recent advance.
Technical resistance halts the rally
Cardano's 30% rally last week ran into a wall at the 200-day exponential moving average (EMA), currently near $0.2483. An overhead descending trendline around $0.2333 also capped gains on Saturday, preventing buyers from extending the move.
The broader crypto market has also cooled, with Bitcoin slipping below $79,000 after briefly touching the $80,000 psychological level earlier this week. Other major altcoins, including Ethereum, Solana, and XRP, are also pulling back following the recent market-wide rally.
ADA has now reversed lower and displays a mildly bearish short-term bias. The token is drifting toward the 50-day EMA at $0.1898, which serves as the immediate support level. A decisive daily close below this threshold could accelerate the correction toward an ascending trendline near $0.1705.
Daily momentum indicators reinforce the weakening technical picture. The Relative Strength Index (RSI) has fallen to 52 after retreating from overbought territory. While still above the neutral 50 level, its downward slope indicates that bullish momentum is waning.
The Moving Average Convergence Divergence (MACD) indicator and its signal line remain above zero, but both have started to flatten. Contracting histogram bars further suggest that buyers are gradually losing control.
Key levels to watch
The 50-day EMA at $0.1898 is the first major support for Cardano. A break below this level could open the door to the ascending trendline near $0.1705, which may determine whether ADA maintains its broader recovery structure or enters a deeper decline.
On the upside, Cardano must reclaim the 200-day EMA at $0.2483 to restore its bullish outlook. A confirmed breakout above that resistance could extend the recovery toward the February 3 high at $0.3050.
As the market digests recent gains, traders will be watching whether ADA can hold above the 50-day EMA or if the correction deepens. The coming sessions will be crucial in determining the token's near-term direction.
This article is for informational purposes only and does not constitute financial advice.
