Cardano’s Comeback in Jitters As ADA Price Paints 35% Crash Setup

Cardano (ADA) has recovered by a modest 12.70% after plunging to $0.51 on April 7, its lowest point in over two months. Nonetheless, the rebound could be a bull trap, per a mix of technical and derivatives data.

Cardano Technical Analysis: ADA Ascent Scenario in Trouble

Cardano has entered what appears to be the breakdown stage of its prevailing head-and-shoulders (H&S) pattern, signaling a deeper bearish trend.

A H&S pattern occurs when the price forms three peaks atop a common neckline support, with the middle peak (head) rising higher than the other two (shoulders).

As a rule, an H&S pattern resolves when the price closes decisively below the neckline and falls by as much as the pattern’s maximum height, i.e., the distance between the head’s highest point and the neckline.

ADA appears to have formed a similar pattern, and, as of April 9, had broken below its neckline support of around $0.62 with strong volume, confirming the bearish setup.

The measured move from the top of the head to the neckline projects a downside target near $0.353, a 35% drop from the breakdown level.

Price action has also lost the 50-3D and 200-3D moving averages, which now act as resistance. This adds more pressure on ADA and suggests that bears are in control. The breakdown is clean, and volume confirms the move.

Momentum indicators support the bearish outlook. The Relative Strength Index (RSI) has dropped to 38.72, showing growing downside momentum while staying just above oversold territory. This gives sellers more room to push prices lower.

Cardano Funding Rates Flips Negative

As of April 9, ADA’s futures open interest (OI) has dropped significantly from its February peak of $1.50 billion to around $600 million, reflecting a sharp decline in trader participation and conviction.

At the same time, the OI-weighted funding rate remains consistently negative, dipping as low as -0.004% per eight hours as of April 9. This shows that short positions are dominating the market, as traders are paying to keep bearish bets open.

Together, falling open interest and negative funding rates paint a clear picture: traders are de-risking, bearish sentiment is strong, and the breakdown has fundamental support in the futures market.

Until open interest stabilizes and funding rates flip positive, the path of least resistance for ADA remains downward, thus increasing the odds of a 35% crash as discussed above.