Cardano (ADA) traded near $0.1900 on Wednesday after falling 5% during the previous session and breaking below an important cluster of technical support levels.
Declining transaction activity, weaker network revenue, and falling futures open interest indicate reduced demand for ADA.
Technical indicators also favor sellers, placing the next major support near $0.1647—approximately 15% below the current price.
Cardano transaction count falls by more than half
Activity across the Cardano ecosystem has weakened considerably in recent weeks, according to Messari data.
The network processed 14,536 transactions on Tuesday, down from 40,063 on August 21. That represents a decline of approximately 64%.
Cardano’s Real Economic Value, which measures transaction fees and paid failure collateral, also fell to $1,167 from $2,796 on August 22.
Lower transaction activity suggests weaker demand for Cardano’s blockspace and fewer users interacting with applications on the network.
It also reduces the amount of ADA required to cover transaction fees, potentially weakening one source of organic demand for the token.
The contraction may make it more difficult for Cardano to gain market share against competing layer-1 blockchains unless network activity recovers.
Cardano’s derivatives market also reflects declining speculative interest. ADA futures open interest fell by more than 6% over 24 hours to $411.50 million, according to CoinGlass.
The decrease indicates that traders closed positions or that falling prices reduced the dollar value of outstanding contracts.
Total ADA liquidations reached approximately $2.67 million during the period. Long positions accounted for $2.54 million, showing that traders betting on higher prices suffered nearly all the forced closures.
The open-interest-weighted funding rate remained positive at 0.0030%, meaning long traders were still paying shorts.
However, it declined from 0.0051% a day earlier, indicating that bullish demand for leveraged positions is fading.
ADA breaks below key moving averages
Cardano’s 5% decline pushed the token beneath its 50-day exponential moving average at $0.1994 and its 100-day EMA at $0.2002.
ADA also fell below the 50% Fibonacci retracement level at $0.1999, measured from the decline between $0.2887 and $0.1385. Losing this cluster around $0.20 reinforces the short-term bearish outlook.
The 200-day EMA remains considerably higher at $0.2442, highlighting the distance ADA must recover before establishing a stronger long-term bullish structure.
The next significant downside target is the 23.6% Fibonacci retracement level at $0.1647. A decline to that level would represent a loss of approximately 15% from ADA’s current price.
Momentum indicators support the bearish scenario. The Relative Strength Index stands at 43, signaling subdued buying pressure without placing ADA in oversold territory.
Meanwhile, the Moving Average Convergence Divergence indicator and its signal line continue to decline. Their expanding bearish structure suggests downside momentum remains strong.
For ADA to weaken the bearish outlook, buyers must reclaim the resistance cluster between $0.1994 and $0.2002. A sustained recovery above that area could shift attention toward the 200-day EMA at $0.2442.
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