Cardano (ADA) before the new storm as tariff storms from the US are approaching

Cardano (ADA) continues to face selling pressure, declining 4% at the time of update on Monday, marking its third consecutive plunge. The negative developments in the derivative market positioning of Cardano clearly reflect a cautious sentiment prevailing across the overall cryptocurrency market. This pressure has intensified amid U.S. President Donald Trump reconsidering global tariffs and domestic tensions related to the U.S. Supreme Court. Technically, Cardano’s outlook remains bleak as the downtrend dominates and a key support zone faces an important test.

Cardano Under Pressure as Macroeconomic Factors Weigh Down the Cryptocurrency Market

Cardano is gradually losing appeal among retail investors after a week of intense volatility. As the cryptocurrency market enters a correction phase, renewed concerns over U.S. tax policies have heightened the risk of ADA’s sharp decline becoming more pronounced.

According to data from CoinGlass, the open interest (OI) in ADA futures contracts currently stands at only $424.84 million, down 4.25% in 24 hours. This trend indicates a clear withdrawal of capital from the market, reflecting a defensive and risk-averse mindset among traders.

This capital outflow also coincides with a total liquidation value of $1.86 million over the past 24 hours, mostly from long positions being forced to close. This ongoing pressure continues to push the price downward and has caused the long/short ratio to drop to 0.8619 — a sign that the bears (shorts) are gaining the upper hand.

Notably, the funding rate has fallen to -0.0138%, indicating an increasing number of traders are willing to pay fees to maintain short positions. Historically, a funding rate below -0.010% often reflects high selling pressure that is difficult to sustain long-term, potentially motivating some investors to open long positions to profit from the funding paid by short sellers.

ADA Derivatives Data | Source: CoinGlass

Technical Outlook: Will Cardano Drop Below $0.25?

Cardano continues to be under selling pressure, dropping about 4% at the time of writing on Monday. This weakening comes right after the coin broke below the short-term support level formed by the lows on February 11 and 19, signaling a new negative outlook for the short-term trend.

Currently, Cardano is trading below two key exponential moving averages: the 50-period EMA at $0.2773 and the 200-period EMA at $0.3013, indicating the market structure remains strongly bearish. The 50 EMA remaining below the 200 EMA further reinforces the bearish outlook.

The price decline is bringing Cardano close to the 50% Fibonacci retracement level at $0.2593 — measured from the peak on February 3 at $0.3050 to the bottom on February 6 at $0.2289 on the 4-hour chart — aligning with the scenario previously forecasted by Coin Photon.

If the price decisively closes below this critical support, selling pressure could intensify, pushing Cardano to test the 38.2% Fibonacci retracement at $0.2496. This level is considered the last stronghold before the price potentially retests the February 6 low around $0.2205.

ADA/USDT 4-hour Chart | Source: TradingView

Momentum indicators are also flashing warning signals. The Relative Strength Index (RSI) on the daily chart has fallen to around 30, deep into oversold territory after a series of declines, indicating that selling pressure is dominant. Meanwhile, the MACD remains below zero with increasing negative histogram bars, confirming that downward momentum continues to grow.

In a more optimistic scenario, if Cardano manages to recover and surpass the 61.8% Fibonacci retracement at $0.2695, the price could attempt to retest the key EMAs at $0.2773 (50-day EMA) and further at $0.3013 (200-day EMA).