Cardano (ADA) is showing signs of weakness as its long/short ratio drops, signaling a surge in selling volume. This metric suggests that more traders are betting against the price rising. Additionally, declines in other on-chain metrics might push ADA price to the bottom. With this change, investors are now wondering if ADA could slip below the key $0.70 support level. Could a bigger price correction be coming soon?

Cardano’s Open Interest Declines

Cardano (ADA) saw an impressive rally in July, gaining nearly 30% in value—one of its best performances in recent months. This surge was largely boosted by favorable macroeconomic news that triggered strong buying activity across the crypto market.

However, despite the strong price performance, recent data from Coinglass reveals signs of market instability. Cardano experienced over $7.79 million in total liquidations, with a significant majority of about $7.54 million coming from long positions. This means that many traders who bet on the price continuing to rise were forced to close their positions, likely due to sudden price rejections or high volatility.

In the short term, trading activity remains strong, with a 12% increase in 24-hour volume pushing it up to $2.54 billion. But not all indicators are positive. Open interest, which shows how many futures contracts are still active, has dropped by 8%, now standing at $1.28 billion. This decline suggests that fewer traders are keeping positions open, possibly hinting at a low confidence in further price gains.

Also read: Michael Saylor Reveals Strategy’s $100 Billion Bitcoin Plan

The long/short ratio has slipped below 1 to 0.8829, meaning there are more short bets than long ones. About 53% of traders expect ADA to fall in the next few hours. With sentiment turning bearish, selling pressure is rising, and ADA is struggling to break through its immediate resistance levels.

What’s Next for ADA Price?

Cardano (ADA) dropped below its 20-day exponential moving average (EMA) at $0.76, a sign that sellers might be gaining control. As of writing, ADA price trades at $0.7272, declining over 4% in the last 24 hours.

There’s some support around $0.67, but if that fails, the price could fall further to $0.51 and possibly down to the 50-day SMA near $0.339. This would suggest that ADA might stay stuck in a wider trading range between $0.4 and $0.5 for some time.

A break and close above the 20-day SMA would be the first sign of strength, showing that sellers are losing momentum. If that happens, buyers might try to push the price past the key resistance around the descending trend line.

A break above the trend line might send the ADA price soaring. A surge above the resistance line could begin an upward trend toward $1 for Cardano price. With the RSI level now nearing the oversold region at level 32, a bullish correction is expected to take place.