ADA Plunges 50%: Can Bulls Defend Range-Low Amid Bitcoin's Woes?

Cardano's ADA token has experienced a significant decline, dropping by over 50% from its December peak of $1.3. Despite hitting a pivotal point, demand for ADA remains weak, with weekly losses topping 12% due to ongoing bearish pressure following Bitcoin's drop below $90K.

The recent acknowledgment of the Grayscale Cardano ETF did not significantly boost demand, highlighting macro uncertainty as a key risk factor for the altcoin and the broader market. However, a slight 2% drop in Bitcoin dominance was seen as positive news, potentially offering relief to altcoins like ADA.

At the time of writing, Cardano was testing the range low of a multi-month downtrend channel, which also served as a bullish order block at $0.69. Technical indicators showed mixed signals, with the daily RSI below a neutral level indicating muted demand, but the Chaikin Money Flow (CMF) flipping positive, suggesting improved inflows.

ADA's speculative interest in the futures market dropped by over 60% from $1.48B in January to $555M, indicating that investors withdrew money from the derivatives market, a bearish signal. There were four key pockets of liquidity worth tracking: $0.78, $0.75, $0.7, and $0.62. In case of a liquidity sweep, the altcoin could fluctuate between these key levels, especially if Bitcoin fails to set a decisive direction.

ADA bulls could attempt to defend the range-low if Bitcoin recovers, but a sustained sell-off could drag ADA to $0.56, the first cool-off zone after the post-US election upswing. The future of ADA's price depends on various factors, including Bitcoin's performance and overall market sentiment.