Market Data 
Cardano (ADA) price has dropped by 10% within a wedge pattern, signaling a potential breakdown. Will a deeper correction push Cardano down to $0.50?
As Bitcoin drops under the $90,000 mark for the first time in a month, Cardano is down at $0.65. With an overnight crash of 10.05%, the bearish trend continues with an intraday drop of 5.42%.
With the increased anticipation of a downfall below the $0.65 support zone, the bearish sentiments over the ADA price trend are increasing significantly. Will this lead to a downfall in Cardano to $0.50?
Cardano Price Breakdown: Bearish Pressure Intensifies
In the daily chart, the ADA price trend reveals a bullish failure to overcome the 20-day EMA line. With an overhead rejection, the bullish failure to overcome the local resistance trendline has led to the current downfall.
Reversing from the 50% Fibonacci level at $0.7746, the Cardano price is now testing the bullish dominance at the 38.20% Fibonacci level. The current downfall has breached the 200-day EMA line at $0.7289 and is potentially heading to test the local support trendline.
With the current downfall, the 50-day and 100-day EMA lines are on the verge of giving a negative crossover. Furthermore, the Chaikin Money Flow Index has turned negative due to the recent crash. Thus, the technical indicators warn of a massive plunge ahead.
Cardano Funding Rate Signals Volatile Market Sentiment
Amid the increased selling pressure, the Cardano funding rate has fluctuated significantly. Currently, it is down at 0.0045%, while open interest has dropped by 15%, falling to $544.94 million.
Cardano Derivatives
Overall, the long-to-short ratio of Cardano remains at 0.9216, while Binance traders remain optimistic with a ratio of 2.73. This reflects minor optimism in the Binance traders for Cardano.
Cardano ETF Proposal – Will This Spark a Recovery?
The short-term optimism in crypto traders comes with the United States Securities and Exchange Commission (SEC) acknowledging 19b-4 filings to list Cardano ETF. NYSE Arca, a subsidiary of the NYSE Group, made the filing.
The proposal seeks approval to list and trade Grayscale’s Cardano Trust shares under NYSE Arca Rule 8.201-E (Commodity-Based Trust Shares).
As the broader market witnesses a major crash, the downfall to the support trendline near the $0.60 psychological mark seems inevitable. However, if the broader market stabilizes, the increased optimism with the SEC acknowledging Cardano’s ETF proposal could result in a bullish reversal within the falling wedge pattern.
Based on Fibonacci levels, the crucial support for Cardano now remains at the 23.60% Fibonacci retracement level at $0.53. On a bullish front, the potential resistance for the trendline breakout rally is the 50% Fibonacci level at $0.7746.
