- Cardano (ADA) is at a crucial level; if it drops further, a significant dip may occur.
- Sellers are strong, and buyers are weak, making ADA struggle to stay above support.
- A recovery above resistance may bring hope to ADA, but a deeper drop may be near.
Cardano (ADA) is testing the critical 0.5 Fibonacci retracement level at $0.6519, with increased bearish activity signaling a potential breakdown. Analyst CryptoBusy warns that a failure to defend this level could push ADA toward $0.5512, corresponding to the 0.618 retracement, an area that previously provided strong support. Concerns over liquidity further increase the risk, adding to ADA’s price volatility.
At press time, ADA trades at $0.6750, down 6.80% for the past day, with a session low of $0.6587. The Fibonacci retracement, measured from $0.3201 (cycle low) to $1.3276 (cycle high), highlights $0.6519 as the critical support before a significant selloff. Multiple failed attempts to break above $0.75-$0.77 suggest that buyers are struggling to regain control, reinforcing seller dominance in the market.
Price Action Points to Further Downside Risks
The Heikin Ashi candle structure reveals consecutive red candles with extended lower wicks, reflecting persistent selling pressure and heightened volatility. If ADA loses $0.6519, a rapid decline toward $0.5512 is likely, with the 0.786 retracement at $0.4340 emerging as a deeper support target.
CryptoBusy describes the situation as a “trapdoor” scenario, suggesting that if buying interest remains weak, ADA could see a rapid price drop. ADA’s historical price behavior shows that sharp recoveries from deep retracements are possible. However, the weak momentum suggests that demand is not strong enough to counteract sales orders.
Market-Sentiment Shifts as Traders Brace for Volatility
Trader Dippy.eth warns that “sellers will be the make or break,” emphasizing the importance of strong buying pressure at this level. Many traders are closely monitoring ADA’s response to $0.6519, with $0.7711 (0.382 retracement) being a critical level for any potential recovery.
With $0.6519 under pressure, ADA is at a pivotal point. A successful reclaim of $0.7711 would indicate bullish resilience, while a drop below $0.5512 could lead to a prolonged decline.
Related: SEC Acknowledges Grayscale’s Spot Cardano ETF Filing
Cardano ETF Filing Adds to Market Developments
On February 24, the U.S. Securities and Exchange Commission accepted Grayscale’s proposal for a spot Cardano ETF, which is now under review for potential listing on NYSE Arca. This development sets the initial track for the beginning of the review process, with a final decision expected by August 2025.
The ETF proposal aims to offer exposure to ADA, eliminating the need for direct crypto holdings. Instead, shares of the Grayscale Cardano Trust will represent the fund’s ADA holdings, allowing investors to trade shares rather than hold ADA directly.
The trust is designed to track ADA’s price using an index based on trading data from exchanges like Coinbase, Bitfinex, and Kraken. These platforms were selected based on compliance with U.S. regulations. Coinbase Custody will manage the trust’s ADA holdings, ensuring geographically distributed private key storage and robust security measures.
