Cardano (ADA) recently garnered attention with news of its inclusion in the Chicago Mercantile Exchange (CME) futures products. While this development emerged during a turbulent period for the broader crypto market, the prevailing analysis suggests that ADA's long-term price trajectory remains firmly bearish, despite any potential short-term bounces.
Long-Term Outlook Remains Bearish
Cardano's weekly price structure has exhibited a strong bearish bias since October, marking a significant downturn. The asset's failure to hold crucial support levels, notably the $0.53 zone which was vital earlier in the year, dealt a substantial blow to bullish sentiment. Currently, ADA has been testing another key support around $0.246, with historical data indicating that the $0.22-$0.27 range has served as a long-term demand zone since late 2022. Bulls are keen to defend these historical lows to prevent further downside.
Navigating the Short-Term Bounce and Trading Strategy
Despite the overarching bearish trend, a short-term bullish divergence between the Relative Strength Index (RSI) and price action has provided a brief respite. However, this bounce appears to be nearing its conclusion. Analysts predict that ADA may briefly retest the 78.6% Fibonacci retracement level at $0.287 before resuming its longer-term downtrend. For active traders, a short-selling opportunity is identified upon a retest of $0.287, targeting the $0.22 lows, with a stop-loss just above the local high of $0.305.
Investor Considerations and Potential Scenarios
Long-term investors are advised against premature entry, as forming a true market bottom can span weeks or even months. While the primary outlook is bearish, traders should also be cognizant of a potential "liquidity hunt" scenario. Should Bitcoin experience a significant rally, pushing past $74k towards $80k, Cardano might see a temporary surge above $0.3. In such a scenario, the $0.33-$0.35 supply zone is expected to act as a firm ceiling for any upward movement before the broader bearish trend reasserts itself.
