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- ADA fell 6% in 24 hours, briefly touching $0.267 before stabilizing.
- High Open Interest suggests bearish positioning still dominates.
- Whale accumulation hints at long-term confidence despite short-term risk.
Cardano is once again under pressure as the broader crypto market reels from Bitcoin’s slide toward the $75,000 level. ADA, a long-time top 10 asset, fell sharply on February 2, dropping roughly 6% in 24 hours to touch $0.267 before stabilizing near $0.28.
The move has rattled traders who previously treated dips below $0.30 as buying opportunities. While technical indicators suggest oversold conditions, history shows that rebounds from these zones have often been unstable. With momentum fragile, investors are questioning whether this bounce marks the start of a recovery — or simply another pause before further downside.
ADA Slips Below a Psychological Line
The break beneath $0.30 represents more than just another red candle. That level has acted as a psychological floor during past declines, and its loss has shifted sentiment.
Cardano’s Relative Strength Index (RSI) now sits below 30, typically considered oversold. In previous cycles, this condition preceded short-term rebounds. However, those bounces were often volatile and short-lived, suggesting that oversold readings alone may not guarantee a sustained reversal.
The current stabilization near $0.28 shows buyers stepping in, but conviction remains thin.
Open Interest Suggests Bears Still Dominate
Derivatives data paints a cautious picture. Open Interest (OI) in ADA futures has remained elevated even as price continues to weaken.
By mid-January, total OI climbed to around $840 million, yet this increase did not correspond with bullish price action. Instead, it appears to reflect traders positioning for continued downside.
For sentiment to meaningfully improve, analysts say ADA would need to reclaim roughly $0.32 while OI rises alongside price — a signal that long positions are returning with strength.
Until then, the derivatives market suggests bears still hold the upper hand.
Whales Accumulate While Retail Hesitates
On-chain data offers a contrasting signal. According to CryptoQuant, large holders have increased buy orders as ADA’s price dips, a pattern often associated with accumulation.
Notably, whales became more aggressive after ADA fell below $0.80 and have continued to add exposure during subsequent declines. Retail participation, meanwhile, appears more hesitant.
This “front-running” behavior has preceded rebounds in past cycles, but timing remains uncertain.
The $0.267 area now stands as critical support — a zone that played an important role throughout 2024. Holding above it could open the door to a rebound toward resistance between $0.32 and $0.358. A stronger push could eventually target $0.43 and potentially form a double-bottom pattern.
Also Read: Cardano at a Breaking Point: ADA Faces 25% Drop or Sharp Rebound
Failure to defend this level, however, may expose ADA to a deeper slide, with some projections pointing as low as $0.13 if Bitcoin weakness intensifies.
Cardano sits at a crossroads. Oversold conditions and whale accumulation hint at recovery potential, but bearish derivatives positioning and fragile market sentiment argue for caution. Whether ADA stabilizes or slides further may depend less on its own fundamentals and more on Bitcoin’s next move.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
