Cardano Price Forecast: ADA risks 15% downside as retail demand, bullish momentum wane

• Cardano holds steady around $0.2200 on Monday after facing a 12% decline last week.
• Derivatives data shows declining Open Interest and a fluctuating funding rate, implying weak retail demand.
• The technical outlook for ADA is bearish, pointing to nearly 15% downside potential toward the $0.1894 support level.

Cardano (ADA) is trading above $0.2200 at press time on Monday, holding steady after a 12% decline the previous week. The altcoin is losing retail interest as the notional value of active ADA futures positions declines. The technical outlook for ADA suggests a downside bias following the bearish breakout below a near-term support trendline last week.

Is Cardano losing retail support?

Cardano maintains a corrective tone, with a decline of over 10% so far in October, capping retail speculation. CoinGlass data shows the ADA futures Open Interest (OI) is declining, down to $475.58 million on Monday, from $549.14 million last week. This indicates a significantly reduced notional value of active contracts, linked to a declining spot price or positional wipeout.

At the same time, the funding rate stands at 0.0032%, reflecting a bullish bias among traders, anticipating a rebound, although the downside risk persists and increases the risk of a long squeeze.

On the other hand, Cardano’s large-wallet investors, commonly referred to as whales, remain muted. Santiment data shows investors holding over 100 million ADA tokens account for 15.99% of the circulating supply, marginally up from 15.95% last week, while the cohorts holding 10 million to 100 million tokens have stabilized at 38.11%, down from 38.27% in the same period.

Taken together, muted whale activity and declining retail demand reaffirm the short-term correction bias.

Technical outlook: Will Cardano price extend its decline below $0.20?

Cardano holds steady above $0.2200 on Monday, after a bearish breakout of a declining trendline around $0.2321 last week. The ADA price holds beneath both the 50-day and 200-day Exponential Moving Averages (EMAs) at roughly $0.2290 and $0.2395, respectively, reinforcing the bearish bias.

Momentum indicators add a negative bias as the Moving Average Convergence Divergence (MACD) is below zero with a negative histogram, and the Relative Strength Index (RSI) is hovering near 42, suggesting sellers retain the upper hand without yet reaching oversold conditions.

The path of least resistance warns of a steeper decline toward the next support level in sight, aligning with the August 30 low around $0.1894, implying a downside risk of nearly 15%.

On the topside, initial resistance is seen at the 50-day EMA near $0.2290, with the prior uptrend support-turned-barrier around $0.2321 forming the next cap, ahead of stronger supply at the 200-day EMA close to $0.2395.

(The technical analysis of this story was written with the help of an AI tool. Know more.)