Cardano is up by less than 1% and is trading above $0.25 after a positive start to the week.
The coin lost 9% of its value last week despite Bitcoin and other major cryptocurrencies rallying higher.
Currently, the ongoing geopolitical conflicts dampen the broader risk sentiment.
Furthermore, on-chain and derivatives data for ADA support a negative outlook as Open Interest (OI) and daily active addresses are dropping, indicating waning investor participation.
The momentum indicators also signal a bearish trend, with sellers currently in control of the market.
Retail participation continues to decline
ADA lost 9% of its value last week as retail participation has been declining.
Data obtained from CoinGlass shows that Cardano’s futures Open Interest (OI) dropped to $424.54 million on Monday.
The OI has been declining since mid-January, reflecting waning investor participation and projecting a bearish outlook.
Furthermore, Santiment’s Daily Active Addresses index, which tracks network activity over time, suggests a bearish outlook for Cardano.
With this index, a rise indicates greater blockchain usage, while declining addresses point to lower demand for the network.
Cardano’s Daily Active Addresses have been steadily declining since the end of January and currently stand at 13.5K as of Monday.
The decline indicates that demand for ADA’s blockchain is decreasing, painting a bearish outlook for the coin.
Cardano price forecast: ADA’s recovery capped by a bearish trendline
The ADA/USD 4-hour chart is extremely bearish as Cardano is the worst performer among the top 10 cryptocurrencies by market cap last week.
At press time, ADA is trading at $0.2551, below the long-term 50-day and 100-day Exponential Moving Averages (EMAs).
This keeps the broader picture bearish, with the descending trendline from $0.3175 still capping the upside recovery despite a recent test near the $0.27 breakout area.
The momentum indicators are also bearish at the moment.
The Relative Strength Index (RSI) on the 4-hour chart at 43 shows weak momentum, consistent with its performance over the last few days.
The Moving Average Convergence Divergence (MACD) has slipped back toward the zero line with the MACD line hovering around the signal line, indicating a mildly bearish near-term bias.
The trendline shows immediate resistance around the $0.27 to $0.28 areas.
If price breaks out of this trendline, ADA could rally higher and test the horizontal barrier near $0.32 in the near term.
An extended bullish scenario would bring the $0.35 psychological level into focus.
However, if the bearish trend continues, ADA will likely retest the recent structural support level just above $0.24.
Breaking this support will expose ADA to a deeper pullback within the prevailing downtrend.
If ADA’s price continues to trade below $0.27 and the declining EMAs, then the bears will remain in control of the market.
Any bounce into resistance will likely face further selling pressure.
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