Cardano (ADA) continues to underperform the broader crypto market, trading below $0.24 on Wednesday after a 2% decline in the past 24 hours. The digital asset, which lost its top-10 ranking earlier this month, is now facing mounting bearish pressure from both on-chain and derivatives data, raising the likelihood of a deeper correction.
On-Chain Data Points to Selling Pressure
According to data from Santiment, Cardano's Network Realized Profit/Loss (NPL) indicator recorded a sharp negative spike on Tuesday. The NPL metric measures the daily network-level return on investment based on on-chain transaction volume. A strong negative reading suggests that holders, on average, are realizing losses—often a sign of panic selling or investor capitulation.
Compounding the bearish outlook, Santiment's Age Consumed index also showed a notable uptick, indicating that previously dormant ADA tokens are being moved, likely toward exchanges. Historically, a surge in dormant wallet activity combined with a negative NPL spike has preceded significant sell-offs in Cardano.
Derivatives Data Reinforces Bearish Sentiment
Derivatives market data further underscores the bearish tilt. CoinGlass reports that ADA's long-to-short ratio currently stands at 0.95, a level that has remained below 1 for most of the past four weeks. A ratio under 1 indicates that more traders are betting on price declines than advances, reflecting a market dominated by bearish sentiment.
Technical Analysis: Key Levels to Watch
On the 4-hour chart, ADA is trading at $0.239, well below its 50-day, 100-day, and 200-day exponential moving averages (EMAs). The $0.245 resistance level continues to cap any upside attempts, with the 50-day EMA at $0.262 and the 23.6% Fibonacci retracement of the latest downswing at $0.271 adding further overhead supply.
The Relative Strength Index (RSI) sits near 43, indicating weak momentum, while the Moving Average Convergence Divergence (MACD) is slightly negative. These technical readings suggest that any rallies are likely to encounter selling pressure at the aforementioned resistance levels.
If buyers manage to push the daily close above $0.245, ADA could extend toward the 50-day EMA at $0.262 and the 23.6% retracement at $0.271. Further resistance lies near $0.299 and the $0.303 area, where the 38.2% Fibonacci retracement converges with the 100-day EMA. The 200-day EMA at $0.40 remains a distant target given current fragile market conditions.
On the downside, immediate support is seen at $0.22, where buyers are expected to defend the latest cycle low if the sell-off continues. A break below that level could open the door to further losses.
For broader context, Cardano's recent struggles come despite the successful completion of the Van Rossum hard fork, which failed to ignite bullish momentum among traders. Meanwhile, other altcoins like SUI are showing accumulation signals near key resistance, highlighting the divergence in market sentiment.
This article is for informational purposes only and does not constitute financial advice.
