Cardano (ADA) price continues to adjust as retail demand weakens

Cardano (ADA) continues to face strong selling pressure as of Wednesday, amid the bearish dominance across the entire cryptocurrency market. Since the “flash crash” on October 10th, the recovery prospects of this smart contract token have been almost solely based on expectations, despite the key support zone of $0.3707–$0.3775 remaining steadily maintained.

Retail demand weakening limits Cardano’s recovery potential

Since the flash crash on October 10th, Cardano has been under continuous downward pressure due to declining demand, while the derivatives market also loses momentum. According to data from CoinGlass, the open interest (OI) in futures contracts currently stands at only $692 million, a sharp decrease from $842 million recorded on Wednesday, indicating a clear withdrawal of speculative capital.

OI — the measure of the notional value of open futures positions — previously reached an average of $1.52 billion on October 10th. Prior to that, retail investor demand hit a historic high of $1.95 billion in mid-September, when ADA traded around $0.95, reflecting a highly optimistic market sentiment.

Typically, a steady increase in OI signals confidence in a sustainable upward trend, as investors are willing to expand their risk acceptance. Conversely, maintaining low OI not only limits Cardano’s recovery room but also increases the risk of a prolonged downtrend in the medium term.

Cardano Open Contract Volume | Source: CoinGlass## Technical Outlook: Can Cardano Hold the Key Support Zone?

As of Wednesday, when this article was written, Cardano remains resilient above the critical support zone of $0.3707–$0.3775, despite increasing selling pressure. On the 4-hour timeframe, the exponential moving averages (EMA) 50 ($0.4108), EMA 100 ($0.4218), and EMA 200 ($0.4530) are all trending downward, indicating that the bearish trend still dominates price movements.

The RSI indicator on the same timeframe is approaching the oversold zone, reflecting increasing downward momentum. Meanwhile, sell signals from the MACD indicator could make investors more cautious, thereby adding short-term selling pressure.

ADA/USDT 4-hour chart | Source: TradingView The current weakening momentum is pushing to test the key support zone of $0.3707–$0.3775. In a negative scenario, if this demand zone cannot hold, Cardano risks extending its correction to the October 10th low around $0.2756.

Conversely, a breakout above the downtrend line would be an initial signal indicating a notable reversal potential. However, the recovery outlook will only be truly confirmed when the EMA 50 at $0.4108 turns into a solid support zone, laying the groundwork for an upward move toward EMA 100 at $0.4218 and further to the 200-day EMA at $0.4530.

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