- Cardano is under pressure as it trades around $0.650, with declining network activity and negative funding rates signaling bearish momentum.
- Technical indicators like RSI and MACD also suggest further downside unless ADA breaks above the $0.746 resistance level.
Cardano Dips Below Key Levels Amid Weak Network Activity
Cardano (ADA) is facing mounting bearish pressure as the cryptocurrency trades around $0.650 on Tuesday, following a 6% drop over the past two days. The recent slump coincides with a sharp decline in network activity and deteriorating on-chain metrics, painting a bleak short-term picture for the token.
CoinGlass’s OI-Weighted Funding Rate stands at -0.0017%, signaling that traders are heavily shorting ADA. This negative rate suggests prevailing market sentiment leans bearish, as those betting against the token are compensating long traders to keep positions open. The indicator reflects growing skepticism about ADA’s immediate price potential.
Adding to the concern is the consistent drop in Daily Active Addresses, which has fallen to just 21,600—a downtrend that started in early March. This metric, often seen as a proxy for blockchain demand, highlights a waning interest in the Cardano network. Fewer active users suggest reduced utility and engagement, further weakening bullish prospects.
Momentum Indicators Signal Further Downside
Technically, ADA’s failure to break above the key resistance of $0.746 on April 24 triggered an 8.3% slide over the past 12 days. Momentum indicators are now flashing red. The Relative Strength Index (RSI) sits at 46, beneath the neutral 50 level, indicating rising bearish momentum. Additionally, the MACD chart shows a bearish crossover as of Monday—typically a strong sell signal.
If this downtrend continues, ADA could revisit its April 22 low of $0.615. This level is now a crucial short-term support that bulls must defend to prevent deeper losses.
Upside Potential Remains if Resistance Breaks
Despite the prevailing bearish conditions, a decisive close above $0.746 could shift the narrative. A breakout at that level may pave the way for a push toward the next resistance at $0.810, offering traders hope for a renewed uptrend.
For now, though, Cardano faces a challenging road ahead, weighed down by weakening fundamentals and fading market sentiment. Traders and investors should brace for continued volatility.
