Cardano (ADA) has faced sharp price swings, dropping 5% in the past 24 hours. Meanwhile, futures open interest fell 2.6%, settling at $728 million, according to Coinglass. This decline suggests traders have adopted a more cautious stance, reflecting bearish market sentiment. The downturn aligns with broader cryptocurrency uncertainty caused by macroeconomic conditions and the Federal Reserve’s upcoming policy decisions.
Cardano Dips Below Key Support Levels
After briefly climbing to $0.73, Cardano’s price reversed and fell to $0.681 early Tuesday. The cryptocurrency also dropped under the 200-day simple moving average (SMA) at $0.70, a critical level traders closely monitor.
Despite bullish forecasts, ADA struggled to hold key support levels. However, at the time of writing, it had slightly recovered to $0.71, reclaiming the 200-day SMA. The asset still trades below the 200-day exponential moving average (EMA) at $0.77, signaling ongoing bearish pressure. If buyers regain strength and push ADA above this resistance, it may rally toward $1.02. However, if selling pressure increases, ADA could decline further to support levels at $0.65, $0.62, $0.58, and $0.50.
Broader Market Conditions Impact Cardano’s Price
Macroeconomic developments continue to fuel uncertainty in the cryptocurrency market, and ADA has not been immune to these effects. Investors are paying close attention to the Federal Reserve’s policy meeting on March 18-19, which could shape market sentiment.
Traders have shown increased caution, evident in the shrinking futures open interest. This metric tracks the number of unsettled futures contracts and helps gauge investor sentiment. A decline in open interest indicates reduced confidence and hesitation in making leveraged bets on ADA’s future price movements. The coming days may reveal whether traders regain confidence or continue reducing their exposure.
Institutional Interest in Cardano Remains Strong
Despite ADA’s short-term struggles, institutional investors remain interested in the cryptocurrency. On Monday, Hashdex submitted a request to the U.S. Securities and Exchange Commission (SEC) to amend its Hashdex Nasdaq Crypto Index US ETF (NCIQ). The firm seeks approval to include Cardano and other leading altcoins in the fund’s holdings. If approved, the move could boost institutional exposure to ADA and strengthen its long-term adoption.
Coinbase has also expressed growing interest in Cardano. The exchange recently announced plans to introduce ADA futures contracts, pending approval from the Commodity Futures Trading Commission (CFTC). If regulators approve the request, traders will gain new opportunities to engage with Cardano, which could help integrate the asset further into traditional financial markets.
Can ADA Regain Momentum?
Cardano’s recent price action highlights the volatility within the cryptocurrency sector. The asset remains vulnerable to macroeconomic pressures, regulatory developments, and shifting trader sentiment. If buyers regain control and push ADA above the 200-day EMA, bullish momentum could propel the price toward $1.02. However, persistent bearish pressure may lead to further declines, testing support at lower price levels.
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As institutional interest continues to grow, Cardano’s long-term outlook remains positive. The next few days will be crucial in determining whether ADA can recover or face additional downward pressure. Traders should closely watch key resistance and support levels as they navigate the evolving market conditions.
