Cardano Faces Downside Risk as March’s Midnight Could Signal a Reversal

▲ Cardano (ADA)

Cardano (ADA) is precariously holding a key technical support level, standing at a critical crossroads amid a sharp decline in retail investor demand.

According to cryptocurrency media outlet FXStreet on February 16 (local time), Cardano has recently fallen out of market favor and continues its downward trend. Despite founder Charles Hoskinson announcing the integration with LayerZero and the planned launch of the Midnight mainnet in March at Consensus 2026 in Hong Kong, market reaction has remained lukewarm.

Data from CoinGlass clearly shows a large-scale exit of investors from the Cardano futures market. Over the past 24 hours, open interest plunged 9.55% to $447.07 million, while a wave of liquidations in the derivatives market accelerated capital outflows. Long position liquidations reached $932,080, significantly exceeding short liquidations of $84,010, and the funding rate fell to -0.0076%, indicating a growing number of investors betting on further declines.

From a technical perspective, Cardano is attempting to hold support near $0.2772, the 50-week exponential moving average (EMA) on the 4-hour chart. However, the 200-week EMA is trending downward at $0.3129, adding further bearish pressure. If the price falls below the 50-week EMA, additional downside toward the 50% Fibonacci retracement level at $0.2669 is possible. The Moving Average Convergence Divergence (MACD) has crossed below the signal line, and the histogram is widening below the zero line, signaling strengthening seller dominance.

The Relative Strength Index (RSI) is hovering around 52, suggesting that momentum has entered neutral territory following recent recovery attempts. However, the formation of gradually higher lows and the fact that price remains above the previous rebound resistance level of $0.2764 offer some remaining hope for a bullish reversal. For Cardano to enter a full recovery phase, it must break above $0.3050 and target a reclaim of the 200-week EMA and the 1.272 Fibonacci extension level at $0.3279.

Despite technical updates within the Cardano ecosystem, the slow recovery in retail demand is expected to weigh negatively on future price direction. Unless a strong catalyst emerges to restore market confidence ahead of the March mainnet launch, the struggle against downward pressure is likely to continue for the time being.

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