Cardano ADA Dips 20% But Technicals Signal Potential Rebound

Cardano’s native token ADA has lost approximately 20% of its value in under two weeks, reigniting concerns among investors. However, recent price movements and technical indicators suggest that a reversal could be on the horizon. The asset is currently testing a key upward trend line that has historically served as a support level during earlier dips in July and August [1]. If this level holds, ADA could retest and potentially exceed its previous high of around $1.

The price chart shows a consistent pattern of higher highs and higher lows, with ADA finding support at $0.56 in early July, $0.66 in early August, and currently hovering near $0.84 [1]. Analysts note that maintaining this trend could signal a continuation of the bullish momentum seen earlier in the year, rather than a full trend reversal.

Weekly technical indicators reinforce this view. The RSI (14) stands at 54.984, placing ADA in the neutral zone and suggesting the token is neither overbought nor oversold. The STOCH (9,6) and MACD (12,26) both show buy signals, indicating upward momentum and a supportive trend for further growth. Additionally, the ADX (14) reading of 28.357 reflects a healthy trend strength, while the ATR (14) of 0.1432 signals relatively low volatility [1]. These metrics collectively support the idea that ADA is still within a long-term uptrend.

Short-term traders, however, should be cautious. Hourly indicators suggest a potential pullback before a sustained upward move, pointing to increased volatility in the near term [1]. While this may present a challenge for short-term market participants, long-term holders can take comfort in the weekly signals and the overall structure of higher highs and higher lows.

Increased speculative activity is also evident in the altcoin market. Open interest (OI) in ADA derivatives has risen to approximately $0.84 million, signaling growing trader interest and potentially more price swings ahead [2]. This surge in options trading is often seen before significant price movements and could play a role in ADA’s next phase.

Community sentiment remains bullish. The official Cardano Facebook group highlighted key signals suggesting a potential price rise in the near future, reflecting the optimism of many ADA holders [3]. However, such forecasts are often speculative and reflect the expectations of a vocal subset of investors rather than concrete technical or fundamental developments.

Notably, crypto analyst Ali Martinez has forecasted a potential price surge to $6 for ADA in the current market cycle [4]. While this target is ambitious, it highlights the belief among some market observers that ADA remains undervalued relative to its technological progress and broader market positioning.

The regulatory landscape remains a point of uncertainty. The U.S. Securities and Exchange Commission (SEC) has delayed a potential Cardano ETF, introducing regulatory ambiguity that could affect institutional adoption [5]. Analysts are divided on how this delay will influence ADA’s price in the short term, with some suggesting it could hinder broader market acceptance, while others believe the impact on retail investors may be minimal.

Looking at historical data, ADA’s price action bears similarities to its performance between February and March 2025, when a sharp decline was followed by a stabilization and gradual upward movement [1]. If history is any indication, a similar rebound could be in the works, provided the critical support level remains intact.

In conclusion, while ADA’s 20% decline has shaken investor confidence, the broader technical and market signals suggest the bearish trend may be temporary. Rising open interest, bullish community sentiment, and analyst forecasts all contribute to a narrative where ADA could soon regain upward momentum. Investors are advised to closely monitor key price levels and broader market developments to gauge the next potential move in ADA’s price trajectory.

Source:

[1] CaptainAltcoin. (2025, August 16). Cardano (ADA) Dips 20%, But That Story Could Soon Change: See What’s Coming. https://captainaltcoin.com/cardano-ada-dips-20-but-that-story-could-soon-change-see-whats-coming/

[2] InsiderFinance Wire. (2025, August 19). Altcoin Options Trading & Tokenized Stocks Surge: Crypto Options Trends for BTC, ETH, ADA, and More. https://wire.insiderfinance.io/altcoin-options-trading-tokenized-stocks-surge-crypto-options-trends-for-btc-eth-ada-more-f97171498928

[3] Facebook · Cardano (Official). (n.d.). Hey Cardanians! This Week Brought a Mix of ... https://www.facebook.com/groups/CardanoCommunity/posts/2208337536257359/

[4] CryptoDnes.bg. (2025, August 26). price: News & Updates - Page 53 of 73 - CryptoDnes EN. https://cryptodnes.bg/en/tag/price/page/53/

[5] AMBCrypto. (2025, August 25). What TRON's Whale Accumulation Reveals About TRX's ... https://ambcrypto.com/what-trons-whale-accumulation-reveals-about-trxs-path-to-0-36/