Cardano [ADA] Drops 5.70% Amid Bullish Uncertainty

Cardano [ADA] is currently trading just above a crucial support level after breaking out of a multi-month falling wedge pattern on the 3-day chart, which has sparked bullish hopes among investors. At the time of reporting, ADA was trading at $0.7709, marking a 5.70% decrease in the past 24 hours. This price movement indicates that bulls are under pressure to regain momentum. If the support level fails to hold, downside risks could increase. Conversely, a sustained defense of this level could reopen the path to $0.84 and higher targets.
Exchange data reveals $9.18 million in net outflows as of the 15th of May, suggesting that traders are moving assets off platforms. Typically, such movements indicate accumulation and reduced sell pressure, supporting a potential bullish outlook if sustained. Cardano may benefit if these outflows continue while the price stabilizes above support. However, if outflows stall and selling resumes, the case for further upside weakens.
Retail traders are heavily biased toward the upside, with Binance data showing 89.56% of accounts are long on ADA, and only 10.44% are short. This extreme imbalance shows strong optimism but also increases downside risk. If the price dips below $0.75, cascading long liquidations could follow. Therefore, this one-sided positioning remains a double-edged sword. Bulls must stay alert and ready to defend critical levels; otherwise, retail exuberance could quickly turn into panic selling and intensify the decline.
Despite the bullish tilt in positioning, ADA’s OI-Weighted Funding Rate remained at 0.0054%, indicating that leveraged traders are not confident. Therefore, open interest remains shallow despite optimism. Without stronger leverage inflows, ADA may lack the push to break above resistance. Thus, the spot market is doing the heavy lifting for now. Realized Cap HODL Waves showed a decline in both 0–1 day and 1–7 day holders, meaning short-term traders are exiting. Fewer short-term movements suggest waning speculative momentum. Therefore, ADA is likely being driven by longer-term positioning, which could help stabilize price action near support. However, without fresh demand, a strong rally may struggle to emerge.
Liquidation Heatmaps show heavy activity near $0.76, $0.78, and $0.82, which will attract price volatility. If ADA surges above $0.78, short liquidations may fuel a sharper move, potentially pushing the price toward $0.84. However, if the price dips below $0.75, long liquidations may occur. These liquidity zones create immediate targets for price action.
In conclusion, ADA remains in a bullish structure but faces growing uncertainty. Spot accumulation and wedge breakout favor upside. However, fading speculative interest and flat funding suggest hesitation. If bulls defend $0.75 and reclaim $0.78, targets at $0.84 and $1.00 become realistic. Otherwise, failure here could shift momentum to the bears.

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