The price of Cardano (ADA) has fallen more than 6% at the beginning of this week, starting December in the red and facing the risk of recording the lowest daily closing level of the year 2025. In the derivatives market, short selling positions are rising to the sky, reflecting the pessimistic sentiment that is spreading among investors.
From a technical perspective, Cardano is at risk of continuing to fall as the Relative Strength Index (RSI) falls into the oversold territory, while the MACD forms a potential bearish crossover, warning of further declines.
Increased discount betting on Cardano as the overall market weakens
The Cardano derivatives market is witnessing a wave of massive capital withdrawal, as the open contracts (OI) for ADA futures fell by 6.82% in just 24 hours, down to 693 million USD. This sudden drop reflects the cautious sentiment of investors amidst a widespread sell-off across the cryptocurrency market.
Notably, the funding rate is recording a level of -0.0057%, indicating that traders are increasingly leaning towards a bearish trend, willing to pay higher fees to maintain short positions.
ADA derive data | Source: CoinGlassAlong with that, the long/short ratio is currently at 0.8765, with short positions accounting for up to 53.29% of the total derivative contracts in the past 24 hours. These figures clearly reflect the dominance of the bears in the Cardano derivative market, as many investors predict that the price of ADA will continue to fall.
Long/Short ratio chart of Cardano | Source: CoinGlass## Technical outlook: Is Cardano facing the risk of falling another 15%?
Cardano continues its sharp decline, slipping below the 0.40 USD mark after “evaporating” more than 30% in November, clearly reflecting the negative trend dominating the market. At the current time, ADA has fallen more than 6% on Tuesday, facing the risk of recording the lowest closing level of the year.
The technical indicators on the daily frame are reflecting increasing selling pressure, as the RSI falls to a level of 26 and continues to fluctuate in the oversold region. If the RSI maintains below the threshold of 30, the likelihood of Cardano undergoing further deep corrections is very high.
Daily ADA/USDT chart | Source: TradingViewAt the same time, the MACD line is approaching the signal line, warning of a potential bearish crossover. In the event that this scenario occurs, negative momentum will return strongly, sending a sell signal for ADA.
Closing below the bottom on November 21 at 0.3876 USD could trigger an additional fall of nearly 15%, pushing ADA back to the bottom on September 16, 2024, at 0.3264 USD. Conversely, if the bulls can hold the level of 0.3876 USD, ADA has a chance to recover above 0.4000 USD and head towards the important psychological level of 0.5000 USD.
SN_Nour
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