Cardano (ADA) Price: Traders Stay Cautious as Price Breaks Down From Channel

TLDR

• Cardano (ADA) traded at $0.3656 on Thursday, down 5.5% in 24 hours and 18.2% over the past week
• The token broke down from its daily trading channel and hit a two-month low below $0.37
• On-chain data shows social dominance at annual lows and dormant wallet activity rising, indicating bearish sentiment
• Trading volume remained steady at $500 million, but price action shows continued selling pressure
• Technical indicators point to potential further decline toward $0.29-$0.30 support levels

Cardano dropped below $0.37 on Thursday, marking its lowest level in two months. The token traded at $0.3656 at the time of writing, showing a daily decline of 5.5%.

Trading activity stayed within a tight range. Intraday movements were limited to between $0.3775 and $0.3898. A small bounce attempt occurred earlier in the session but failed to hold.

The weekly picture shows deeper losses. Over the past seven days, Cardano fell by 18.2%. The two-week decline reached 15%, reflecting steady selling pressure across the market.

Trading volume remained stable at around $500 million in 24 hours. However, price direction continued pointing lower. Many traders appear cautious about entering positions at current levels.

Cardano’s market capitalization stands at approximately $13.8 billion. This keeps it among the larger cryptocurrencies by size. Despite this, buyers have shown hesitation to step in.

Technical Breakdown Shows Channel Failure

The token broke down from a well-defined daily trading channel. After losing support at $0.51, selling picked up speed. Since then, rebounds have been shallow and short-lived.

Price action now shows a clear pattern of lower highs and lower lows. The breakdown damaged the previous trading structure. ADA moved below its mid-range channel position, triggering additional selling.

Technical analyst Ali Martinez pointed to $0.29 as the next focus level. Fibonacci analysis shows ADA approaching the 1x retracement near $0.3714. If this level fails, the next support sits closer to $0.30.

The Relative Strength Index on the daily chart reads 32, nearing oversold conditions. This indicates strong bearish momentum. The Moving Average Convergence Divergence indicator showed a bearish crossover on Wednesday.

On-Chain Data Points to Bearish Sentiment

Santiment’s Social Dominance metric for Cardano reached an annual low of 0.032% on Thursday. The metric has fallen consistently since mid-November. This decline shows fading market interest in the token.

The Age Consumed index also signals bearish conditions. Recent spikes in this metric suggest dormant tokens are moving. Historical patterns show that ADA typically declines after such spikes occur. The most recent upticks on December 10 and Monday preceded the current downtrend.

Derivatives data adds to the bearish outlook. The OI-Weighted Funding Rate turned negative on Thursday, down 0.0019%. This means short sellers are paying long holders. When funding rates flip negative, ADA prices have historically fallen sharply.

If the downward trend continues, ADA could test the October 10 low of $0.27. However, a recovery could push the price toward the 50-day exponential moving average at $0.47.

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