- Cardano (ADA) has confirmed a bearish head and shoulders breakdown, signaling a potential 35% drop to $0.35.
- Weak technicals, falling open interest, and negative funding rates suggest strong bearish sentiment and limited recovery momentum.
Cardano (ADA) is sending alarm bells across the crypto community as a potentially devastating pattern emerges. After a short-lived recovery of 12.7% from its two-month low of $0.51, ADA’s rebound might be misleading. Technical signals and futures market data now suggest that the worst could be yet to come.
Head and Shoulders Pattern Confirms Breakdown
On the charts, ADA has decisively broken below the neckline of a textbook head and shoulders (H&S) pattern—a classic setup that often marks the beginning of a steep downtrend. The neckline around $0.62 has been breached with notable trading volume, validating the bearish scenario.
The pattern projects a target near $0.353, implying a potential 35% decline from the neckline level. Compounding the issue, Cardano has also slipped below both its 50-day and 200-day moving averages, which now serve as firm resistance. With these technical indicators aligning, bears appear firmly in control of the trend.
RSI, Futures Data Paint a Bleak Picture
Momentum indicators echo the bearish tone. The Relative Strength Index (RSI) sits at 38.72, showing increased downward pressure while still leaving room for further declines before reaching oversold levels.
Meanwhile, derivatives data supports this negative outlook. Open interest in ADA futures has dropped sharply from $1.5 billion in February to roughly $600 million, revealing a collapse in trader conviction. Even more concerning, funding rates remain negative, dipping as low as -0.004% every eight hours—a clear sign that short sellers dominate the market.
What’s Next for ADA?
Unless ADA manages to reclaim lost technical levels and stabilize its funding structure, the path of least resistance is downward. The confirmation of the head and shoulders breakdown, combined with strong bearish sentiment in the futures market, significantly increases the probability of a 35% crash toward the $0.35 region.
