Cardano Outlook: Price and Market Sentiment

Cardano was down 50% from its December peak of $1.3.
At press time, ADA’s price hit a pivotal point, but demand was still weak.

Cardano’s ADA weekly losses topped 12% as bearish pressure continued following Bitcoin’s BTC drop below $90K.

Even the Grayscale Cardano ETF acknowledgment didn’t induce much demand, reinforcing macro uncertainty as a key risk factor for the altcoin and the broader market.

However, the slight 2% drop in Bitcoin dominance was positive news, which could offer relief to altcoins, including ADA. So, what does price action imply?

Cardano Hits Pivotal Level

At the time of writing, Cardano was down 50% from its December peak of $1.3, marking a multi-month downtrend channel (white). The current price action retested the channel’s range low, which also doubled as a bullish order block (likely support, cyan) at $0.69.

However, technical indicators show mixed signals. The daily RSI is below a neutral level, indicating muted demand. But the Chaikin Money Flow (CMF) flipped positive, suggesting improved inflows.

Simply put, ADA bulls could attempt to defend the range-low if BTC recovers. On the contrary, a sustained sell-off could drag ADA to $0.56, the first cool-off zone after the post-US election upswing.

ADA’s Speculative Interest Drops

ADA’s weak demand was also evident in the Futures market. The altcoin’s speculative interest dropped over 60% from $1.48B in January to $555M, at press time. This meant investors withdrew money from the derivatives market, a bearish signal.

From a liquidity perspective, there were four key pockets of liquidity (bright yellow) worth tracking. The levels were $0.78, $0.75, $0.7, and $0.62.

The $0.78 aligned with the channel’s mid-range level, while $0.62 coincided with the range lows. In case of a liquidity sweep, the altcoin could fluctuate between these key levels, especially if BTC fails to set a decisive direction.