Crypto Quill

Cardano is fighting to hold its ground as the altcoin market faces a sharp downturn. After plunging 10.75% in a single day, ADA’s decline continued with another 3.80% drop, pushing its price to $0.6610. The cryptocurrency briefly touched a 24-hour low of $0.63 but found support, sparking speculation of a potential rebound. Could this lead Cardano back toward the coveted $1 mark?

Will Cardano Withstand the Bearish Pressure?

Cardano has slipped below its 200-day Exponential Moving Average (EMA), breaking through the critical 61.80% Fibonacci retracement level at $0.6673. Despite this setback, buyers have shown resilience, preventing a further collapse.

But warning signs are emerging. Technical indicators suggest increasing bearish momentum:

• The 50-day and 100-day EMA lines are on the verge of forming a bearish crossover, signaling further downside risk.
• The Moving Average Convergence Divergence (MACD) indicator shows its MACD and signal lines converging, a sign that a bearish crossover may soon occur.
• With downward pressure increasing, ADA faces a crucial test to avoid steeper declines.

A sustained break below this support zone could set the stage for a deeper correction, potentially dragging ADA toward lower support levels.

What Are the Key ADA Price Levels to Watch?

The Fibonacci retracement levels provide insight into potential support and resistance zones. If ADA manages to hold its current position and stage a rebound, these price targets come into play:

• A bounce from the local support trendline could push ADA toward the 50% Fibonacci retracement level at $0.7746.
• If the crypto market stabilizes, the next target could be the 38.20% Fibonacci level at $0.8819.

On the flip side, if selling pressure intensifies:

• A decisive break below the local support trendline could open the door for a test of the 78.60% Fibonacci level at $0.5146, just above a major psychological support at $0.50.
• If ADA fails to hold this level, the next key support sits at $0.32, a low that would significantly dampen bullish sentiment.

Could the ETF Filing Trigger a Bullish Reversal?

One factor that could tilt the scales in favor of the bulls is the recent Cardano ETF filing with the U.S. Securities and Exchange Commission (SEC). NYSE Arca, a subsidiary of the NYSE Group, has submitted a 19b-4 filing, seeking approval to convert Grayscale’s Cardano Trust Shares into a spot Cardano ETF.

This proposal falls under NYSE Arca Rule 8.201-E, which governs commodity-based trust shares. If approved, the ETF would provide institutional investors with regulated access to ADA, potentially driving up demand and fueling a market rally.

Historically, ETF approvals have been major catalysts for crypto price surges. The Bitcoin ETF approval in January triggered an immediate price jump, and traders are now watching closely to see if a similar effect could play out for Cardano.

Are Traders Betting on a Rebound?

Despite the current downturn, there are signs of optimism in the derivatives market. However, mixed signals are keeping investors on edge.

• Open Interest (OI): Cardano’s total open interest has dropped 11% to $564.14 million, suggesting that traders are unwinding their positions amid uncertainty.
• Funding Rate: After briefly turning negative on February 20, the funding rate has recovered to 0.0093%, indicating a shift toward bullish sentiment.
• Long-to-Short Ratio: The long-to-short ratio remains bearish at 0.9384, meaning short positions still slightly outnumber long positions.
• Liquidations: Long liquidations have spiked to $7.65 million, suggesting that many traders betting on an ADA rebound have been forced to close their positions.

That said, top traders on Binance and OKX are showing renewed optimism. Data reveals that long positions outweigh shorts by two to three times, suggesting that major players still believe ADA could stage a comeback.

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Table: Cardano Market Overview

Metric	Value	Change
Price	$0.6610	-3.80%
24H Low	$0.63	–
200-Day EMA	Below	Bearish Signal
MACD	Bearish Crossover	Warning Sign
Open Interest	$564.14M	-11%
Long-to-Short Ratio	0.9384	Bearish
Funding Rate	0.0093%	Recovered

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What’s Next for Cardano?

With ADA struggling below key technical levels, the market remains fragile. However, the potential ETF approval and growing institutional interest could provide the much-needed spark for a turnaround. If bullish momentum picks up, breaking above resistance levels could revive the uptrend toward $1.

For now, traders remain cautious, keeping an eye on support at $0.63 and watching for any signs of a broader market recovery.