“We got to the town and the hotel was closed, the restaurants closed,” Hoskinson said, using a travel metaphor. “People are deeply frustrated.” The narrative that kept retail engaged has stopped working, turning the current correction into a morale crisis as much as a market one.
Open Interest Falls As Conviction Weakens
$ADA Derivative Analysis (Source: Coinglass)
According to Coinglass, Cardano’s open interest dropped 9.51% to $446.98 million, one of the sharpest single-day declines in recent weeks. Volume fell 6.13% to $839.68 million, confirming that participation is declining alongside falling open interest. When both metrics drop together, it signals traders are closing positions rather than accumulating at lower prices.
Long/short ratios show extreme bullish skew. Binance accounts hold no shorts on 1-hour timeframes, with $566.72 million in longs. OKX shows 1.77 long/short ratio, indicating leverage remains positioned for recovery despite the negative price action. Top trader positioning shows $226.74 million in longs versus $12.53 million in shorts on 12-hour timeframes.
The disconnect between heavily skewed long positioning and falling open interest suggests long liquidations are occurring as price tests support. When leverage is stacked on one side and open interest declines, it typically indicates forced closures rather than voluntary exits.
Price Tests Ascending Trendline Support
$ADA Price Dynamics (Source: TradingView)
On the daily chart, Cardano is testing the ascending trendline that has provided support since the December lows. The 20-day EMA sits at $0.2912, the 50-day at $0.3331, the 100-day at $0.4025, and the 200-day at $0.5036. All four EMAs remain stacked downward, creating a clear resistance ceiling.
The chart shows:
- Price testing ascending trendline from December lows
- Parabolic SAR at $0.2340, marking next support if trendline breaks
- $0.28 psychological support under pressure
- $0.2912 resistance at 20-day EMA
Cardano dropped from above $0.44 in early January to a low near $0.24 on February 11, marking a 45% correction. The recent bounce to $0.28 represents a 17% recovery from those lows, but the structure remains corrective. The ascending trendline represents the last line of defense before a retest of the February lows.
A breakdown below the trendline would expose the $0.25 psychological level and eventually the $0.2340 SAR zone. A close above $0.2912 would flip the 20-day EMA and signal the first sign of trend exhaustion, but current momentum points toward weakness rather than recovery.
Ascending Trendline Provides Intraday Support
$ADA Price Action (Source: TradingView)
The 1-hour chart reveals Cardano bouncing off the ascending trendline support near $0.2800. Supertrend sits at $0.2895, acting as immediate resistance. RSI holds at 42.28, approaching oversold territory but not yet showing reversal signals.
The structure shows:
- Price defending ascending trendline support
- Higher lows forming from the $0.24 base
- Supertrend resistance capping upside at $0.2895
Buyers are attempting to defend the trendline for the third time in recent sessions. Each test brings increased risk of breakdown, as support levels weaken with repeated testing. Sellers continue to reject price above $0.2895, preventing any meaningful recovery attempt.
A clean break above $0.2895 would flip the Supertrend and place $0.30 psychological resistance back in range. A breakdown below the ascending trendline would trigger another leg down toward $0.27 and eventually $0.25 if selling accelerates.
Outlook: Will Cardano Go Up?
The next move depends on whether $ADA can hold the ascending trendline support and reclaim $0.2912.
- Bullish case: A bounce from the trendline with a close above $0.2912 would flip the 20-day EMA and place $0.30 back in range. Reclaiming $0.30 would signal the corrective phase is ending.
- Bearish case: A breakdown below the ascending trendline exposes $0.25, with further downside toward $0.2340 if Hoskinson’s predicted 90-180 days of pain plays out. Losing the trendline confirms deeper correction ahead.
If Cardano holds the trendline and breaks above $0.2912, momentum shifts. Losing trendline support turns the move into a retest of February lows near $0.24.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.