Cardano Drops 5.70% Amid Volatility, Key Support Levels Tested

Cardano's recent market performance has been marked by volatility and uncertainty, as the cryptocurrency tests key support levels. After breaking out of a falling wedge pattern on the 3-day chart, Cardano [ADA] experienced a 5.70% drop to $0.7709 within a 24-hour period. This price movement has put bulls under pressure to regain momentum, as a failure to hold the support level could increase downside risks. However, a sustained defense of this level could pave the way for a potential bullish breakout, with targets set at $0.84 and beyond.

Exchange data indicates a net outflow of $9.18 million as of May 15, suggesting that traders are moving their assets off platforms. This trend is typically associated with accumulation and reduced sell pressure, which could support a bullish outlook if sustained. However, if outflows stall and selling resumes, the case for further upside weakens.

Retail traders are heavily biased toward the upside, with 89.56% of accounts on Binance being long on ADA, while 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, turning retail exuberance into panic selling and intensifying the decline. Bulls must stay alert and ready to defend critical levels to prevent this scenario.

Despite the bullish tilt in positioning, ADA’s open interest-weighted Funding Rate remained at 0.0054%, indicating that leveraged traders are not confident. This flat rate suggests that without stronger leverage inflows, ADA may lack the push to break above resistance. Realized Cap HODL Waves showed declines in both 0–1 day and 1–7 day holders, meaning short-term traders are exiting. This decrease indicates waning speculative momentum and suggests that ADA is primarily driven by longer-term positioning, which could 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, indicating these zones will attract price volatility. If ADA surges above $0.78, short liquidations may fuel a sharper move, potentially pushing the price toward $0.84. Conversely, if the price dips below $0.75, long liquidations may occur, supporting caution among traders. 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.