Cardano (ADA) has come under renewed selling pressure this week, dropping nearly 10% from its recent highs despite bullish on-chain developments and increasing staking activity.
After hitting a monthly high last week, ADA has now posted two consecutive days of losses, sliding to a low of $0.670 down 4.86% on the day. The cryptocurrency is currently trading over 50% below its November 2024 peak, raising concerns about continued downside momentum.
Staking Inflows Signal Long-Term Confidence
Despite the price decline, Cardano appears to be gaining traction among long-term holders. According to data from StakingRewards, the network witnessed a net staking inflow of 307 million ADA tokens—worth approximately $215 million. Notably, 160 million of these tokens were staked in a single day on April 30.
Cardano’s staking ratio has now surged to 60.65%, significantly higher than that of Ethereum (28%) and Tron (42%). A higher staking ratio is widely seen as a signal of investor confidence and long-term commitment to the ecosystem.
Growing On-Chain Activity
Cardano is also seeing improvements in several fundamental metrics. The total value locked (TVL) in its DeFi ecosystem has climbed to $394 million, driven by protocols like Minswap, Liqwid, Indigo, and Splash Protocol. Additionally, daily DEX volume is averaging over $4 million suggesting healthy user engagement on the network.
Another major catalyst lies ahead: Cardano’s upcoming integration with Bitcoin. This new feature will allow BTC holders to earn yield through a secure, zero-knowledge-based method, potentially drawing more users to the ecosystem.
Technical Analysis: Bears Still in Control
While Cardano’s fundamentals are showing strength, its technical setup remains bearish. The ADA/USD chart reveals a clear downward trend, with the coin falling from its December 2024 high of $1.326 to the current $0.68 level.
Importantly, ADA has slipped below the 61.8% Fibonacci retracement level and the 50-day Exponential Moving Average both considered critical indicators of trend reversal. The recent rejection from the upper boundary of the descending channel further reinforces the bearish sentiment.
Analysts warn that if the downtrend continues, ADA could slide to the lower boundary of the channel around $0.513, which represents a potential 24% downside from current levels. However, a breakout above the channel’s upper trendline would invalidate the bearish outlook and could signal a reversal.
Outlook
While Cardano’s price action is currently bearish, the surge in staking inflows and strong DeFi engagement offer a counterweight to the pessimism. The Bitcoin integration, if successfully implemented, could provide the momentum ADA needs to escape its descending channel.
Until then, traders and investors may continue to watch the $0.513 support level closely, while also keeping an eye on broader market sentiment and upcoming ecosystem developments.
