The ADA token is facing a critical moment trading near its lowest levels of the year, with an approximate accumulated loss of 24% in the last month. According to the most recent market analyses, the current Cardano bearish trend responds not only to sales volume but to significant technical deterioration. Liquidation data and on-chain behavior are key to understanding the asset’s next movement.
In a span of just two months, the asset has completed two distinct bearish continuation patterns, exerting renewed pressure on the global price chart. The first breakdown materialized in early November following the formation of a bearish flag, causing a 38% drop from the high of said technical structure. This repetition of negative technical patterns suggests that sellers maintain total control of the market.
Subsequently, after a brief consolidation phase, a second bearish flag developed between late November and early December, confirming the breakdown on the 11th. When markets print repeated continuation patterns without significant recovery, this signals sustained supply dominance rather than isolated panic selling due to fear. If this breakdown follows the logic of the previous measured move, targets point to lower zones.
Derivatives Market Dynamics and Long-Term Holder Behavior
However, there are factors that could mitigate the risk of a free fall, specifically in the derivatives market monitored by the Gate platform. Long leverage is currently scarce, sitting near $27 million, against a short exposure five times larger of $135 million. With fewer leveraged long positions, the probability of a cascade of forced liquidations is drastically reduced.
On the other hand, the cohort of conviction investors, those holding the asset between one and two years, has halted their sales drastically. According to Santiment metrics, coin movement from this group fell 99.6% since December 10, going from over 660 million to less than 3 million ADA. This reduction in spending indicates that selling pressure from committed holders is drying up.
Will the Current Support Be Enough to Avoid a Collapse Towards $0.25?
The $0.36 level stands as the most important immediate support, coinciding with liquidation clusters identified in recent heat maps. A clean break below this zone would open the door towards $0.33 and, eventually, validate the technical target of $0.25 in the short term. The fragility of the chart requires bulls to defend this zone to avoid a major capitulation.
To reverse this negative outlook, the asset would need to strongly reclaim the $0.48 level, which would nullify the prevailing bearish structure in the token economy. Meanwhile, current recoveries are considered merely corrective within a macro downward trend that has not yet found firm ground on the chart. The market remains on high alert regarding the possibility of testing new lows if demand does not react.
