Key Insights
Cardano continues to trade below its descending resistance with no daily close above $0.41 in over six weeks.
Net inflows to exchanges suggest investors are positioning to sell, limiting the strength of any price recovery.
Rising futures leverage and long liquidations raise downside risk if key support near $0.37 breaks.
Cardano (ADA) is trading close to $0.385 after bouncing from weekly lows near the $0.37 mark. The cryptocurrency attempted to recover following a sharp early-week decline. However, price action remains under pressure with no successful daily close above the descending resistance that has held since August.
On the daily chart, ADA stays below key indicators. The Supertrend sits above at $0.4075, while the Parabolic SAR continues to print overhead resistance near $0.3310. Sellers remain in control of the long-term trend as the price remains trapped below the falling trendline.
No daily closes have occurred above resistance levels since November. ADA remains locked in a corrective structure with no formation of higher lows, confirming the continuation of a bearish outlook.
Short-Term Charts Show Weak Momentum Despite Rebound
On the 2-hour chart, Cardano showed a sharp intraday recovery from the $0.33–$0.34 zone, momentarily lifting it above key exponential moving averages. Price crossed above the 20 EMA at $0.3759 and the 50 EMA at $0.3643, signaling short-term buyer activity.
Source: TradingView
However, the rally failed to push through the 100 EMA at $0.3617 and remains below the 200 EMA at $0.3681. The Relative Strength Index (RSI) fell from near 70 to the low 60s, reflecting fading upward momentum.
Exchange Inflows Reflect Continued Distribution Trend
Spot market data from Coinglass indicates sustained exchange inflows. On January 3, ADA saw a net inflow of -$2.27 million. The ongoing trend of supply moving onto exchanges reflects continued holder intent to sell into strength rather than accumulate.
Throughout the fourth quarter, distribution patterns have been consistent, restricting ADA’s ability to extend rebounds or reclaim resistance zones.
Futures data highlights rising leverage with ADA open interest increasing over 10 percent to around $798 million. Trading volume also surged by 64 percent, reaching $1.73 billion. The market saw more long liquidations than short, totaling $4.27 million versus $3.19 million.
Long-to-short ratios remain skewed in favor of longs, increasing downside risk if ADA fails to maintain support levels around $0.37.
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