Cardano Price Forecast: Does weakness in on-chain and derivatives markets signal further ADA downside?

• Selling pressure keeps Cardano below $0.169 on Friday, taking its losses for the week so far to nearly 4%.
• The continuing correction is reinforced by softer derivatives metrics and bearish signals from on-chain indicators.
• Further downside remains a risk for ADA as its technical outlook weakens.

Sellers remain in control of Cardano (ADA), which trades below $0.169 on Friday as its decline for the week so far approaches 4%. The token is also on course for its sixth straight weekly correction, having shed more than 30% since early October. Deteriorating derivatives metrics and bearish on-chain signals indicate waning market participation. The technical picture, meanwhile, points to the risk of further declines.

What signals a bearish bias in derivatives data?

Bearish positioning is evident in Cardano’s derivatives data, with CoinGlass’ ADA long-to-short ratio standing at 0.86 on Monday, close to its lowest reading in over a month. Readings below one reflect bearish sentiment, with traders positioning for a fall in asset prices.

A further bearish signal comes from Cardano’s funding rate, which turned negative on Thursday and stands at -0.0015% on Friday. This means short-position holders are paying long-position holders, pointing to a bearish outlook.

Why do on-chain metrics warrant caution? 

Caution characterises the outlook for Cardano in CryptoQuant’s summary data. Large whale orders and heating conditions are visible across ADA’s spot and futures markets, with sellers dominating both. Together, these signals reflect a cautious, bearish bias among ADA traders.

Cardano technical outlook: Can bears drive ADA further down?

A bearish near-term bias persists as Cardano trades at $0.168 on Friday. The price remains firmly below its 50-day, 100-day and 200-day Exponential Moving Averages (EMAs), positioned at $0.203, $0.208 and $0.229, respectively.

With the Relative Strength Index (RSI) edging towards oversold territory near 28, momentum continues to look weak. A negative Moving Average Convergence Divergence (MACD) reading and a flat histogram also point to sustained downward pressure, rather than a reversal in the immediate term.

Any recovery would first encounter the horizontal resistance near $0.183, followed by a closely packed EMA cluster spanning $0.203 to $0.229. Further overhead, resistance levels lie at $0.236, $0.245 and $0.296.

Below the current price, the horizontal level at $0.156 provides the next significant support. A decisive break below it would leave ADA exposed to further selling within the ongoing downtrend.

(The technical analysis of this story was written with the help of an AI tool. Know more.)