Cardano (ADA) plunges to mid-month lows amid decreasing retail demand

Cardano (ADA) continues to plummet and approaches the key support level of $0.40 at the time of writing on Friday. Notably, the sell-off occurred even as the US Federal Reserve (Fed) announced a monetary policy easing decision, amid market uncertainty about the 2026 interest rate cut trajectory.

Although the Fed cut the benchmark lending rate by 25 basis points to 3.50%–3.75% early Thursday morning, the overall outlook remains hawkish. Chairman Jerome Powell warned that persistent inflation pressures along with a cooling labor market could lead the Fed to implement fewer rate cuts than previously expected.

In this context, Cardano along with other risky assets likely remains under bearish pressure until the market stabilizes and new strong catalysts emerge to reverse the trend.

Retail investor interest in Cardano declines

The Cardano derivatives market has yet to recover from the shock sell-off on 10/10, when nearly $118 million in long positions and $22 million in short positions were wiped out. In just one day, the cryptocurrency market lost around $19 billion, severely weakening investor sentiment.

Cardano liquidation data | Source: CoinGlassSince that leverage reduction, retail investor demand for Cardano has remained subdued. Open interest (OI) in futures contracts dropped to an average of $773 million on Thursday, down from $847 million the day before. Previously, OI reached $1.51 billion on 10/10 and peaked at $1.95 billion on 9/14.

To improve market sentiment and attract retail capital back, OI needs to recover steadily to establish a firm foundation for a bullish trend.

Open contract volume of Cardano | Source: CoinGlass## Technical outlook: Bears tighten control

Cardano (ADA) is currently trading around $0.41, down more than 15% from its local peak at $0.48. Strong selling pressure keeps this cryptocurrency below key EMA levels: EMA 50 at (0.434 USD), EMA 100 at (0.437 USD), and EMA 200 at (0.47 USD) on the 4-hour chart. Notably, the EMA 50 is crossing below the EMA 100, further confirming the short-term downtrend.

ADA/USDT 4-hour chart | Source: TradingViewThe MACD line has crossed below the signal line and expanded into negative territory, indicating accelerating bearish momentum. Meanwhile, RSI has fallen to 37, suggesting selling pressure dominates but is not yet oversold. The inability of this indicator to stay above the neutral level continues to favor the bears. On the price chart, a downward trendline from around $0.60 is blocking any recovery efforts, with the $0.47 zone serving as a key resistance.

The downward trend strength of ADA is moderate, as reflected by the ADX indicator oscillating around 24 after cooling from previous peaks. If the bulls can push the price back above the EMA 50 and EMA 100 at around $0.43, the recovery momentum could extend toward the EMA 200 near $0.47. Conversely, continued failure at this resistance zone would keep the downtrend in control, pushing ADA back to test the December low at $0.37.