Assessing Cardano's TD Sequential Buy Signal: Is ADA Poised for a Reversal Amid Structural Weakness?

The cryptocurrency market has long been a theater of conflicting forces-technical exhaustion and entrenched bearish structures-competing to dictate price trajectories. Cardano (ADA) finds itself at a critical juncture in late 2025, where a TD Sequential buy signal hints at potential trend exhaustion after a prolonged decline, yet structural bearishness persists. This analysis dissects the interplay between these dynamics to evaluate whether ADA is on the cusp of a reversal or merely facing a temporary reprieve in a broader downtrend.

TD Sequential and the Illusion of Exhaustion

The TD Sequential indicator, a tool designed to identify potential trend reversals based on price action and momentum, has flashed a buy signal for ADA, reaching a count of 9. This level historically suggests bearish exhaustion, particularly after a 18.63% weekly price drop, according to Coinotag. However, such signals must be contextualized within broader market structure. For ADA, the indicator's optimism hinges on a critical confirmation: a sustained break above $0.63 to shift the trend bullish. Failure to do so could see further declines to $0.52–$0.51, as Coinotag notes.

This creates a paradox. While the TD Sequential implies weakening selling pressure, ADA's price remains trapped beneath key resistance levels at $0.62–$0.63, a ceiling that has repeatedly thwarted upward momentum, according to Coinotag. According to a report by Coinotag, this structural barrier reflects deeper market psychology-traders' reluctance to commit capital amid unresolved bearish sentiment. In isolation, the TD Sequential signal is compelling, but its validity is contingent on overcoming these entrenched levels.

Contradictory Indicators: RSI, MACD, and On-Chain Risks

While the TD Sequential offers a glimmer of hope, other technical indicators paint a more nuanced picture. The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) suggest ADA is climbing out of oversold territory, with a bullish MACD crossover signaling a potential shift in sentiment, according to TMStreet. Yet, these signals must be weighed against the reality that ADA's 24-hour price has fallen 1.69%, testing support at $0.6578-a level that, if broken, could accelerate declines toward $0.6550, as Coinotag reports.

Compounding these risks is on-chain data revealing a precarious imbalance. Over 96% of traders are long on ADA, with an average leverage of 5.11x, yet only 14% of positions are profitable, according to Coinotag. This overcrowding of long positions creates a ticking clock for liquidations should the price falter. Historical patterns suggest such imbalances often precede sharp corrections, as margin calls amplify downward pressure.

Fundamental Undercurrents: Progress vs. Short-Term Realities

Cardano's ecosystem continues to evolve, with scalability advancements like the Hydra layer-2 solution and growing DApp adoption offering long-term catalysts, as TMStreet notes. These developments could theoretically underpin a recovery, but their impact on near-term price action remains muted. In a market dominated by sentiment and leverage, fundamentals often take a backseat until structural imbalances are resolved.

Conclusion: A Reversal or a False Dawn?

ADA's technical landscape in late 2025 is a battleground between exhaustion and entrenched bearishness. The TD Sequential buy signal, while suggestive of waning selling momentum, requires a decisive break above $0.63 to gain credibility. Until then, the bearish market structure-defined by repeated failures at resistance and on-chain fragility-remains intact. Investors should treat the current environment as a high-risk setup: a potential reversal is possible, but the path to confirmation is fraught with obstacles.

For now, ADA's fate hinges on whether bulls can muster the conviction to push through $0.63 without triggering a cascade of liquidations. Until that test plays out, the coin remains a study in technical indecision-a tug-of-war between fleeting hope and persistent bearish gravity.