The cryptocurrency market opened the new weekly candle bearish as Bitcoin and other major coins are in the red.
Bitcoin is trading around $68,200 per coin, while Ether risks dropping below $2,000 if the bearish trend persists.
Cardano’s ADA is one of the worst performers in recent weeks.
It is down 12% in the last seven days and has now become the 12th-largest cryptocurrency by market cap, losing its 10th spot to Hyperliquid’s HYPE.
At press time, ADA has dropped below the $0.25 support level and could record further losses in the near term.
Weakening derivatives data, alongside dampened risk sentiment amid escalating conflicts in the Middle East, continue to weigh on ADA, hinting at a deeper correction ahead.
Crypto market reacts to the escalating geopolitical tensions
ADA has lost 3% of its value in the last 24 hours and has now dropped below the $0.25 support level.
The bearish performance comes as the crypto market reacted to the escalating tensions between the US and Iran.
Iran said on Sunday it would strike the energy and water systems of its Gulf neighbours in retaliation if US President Donald Trump follows through with a threat delivered on Saturday to hit Iran’s electricity grid in 48 hours.
The rising war tension is putting pressure on risk-based assets, with BTC briefly dropping below $68,000, triggering widespread liquidations across the crypto market.
Investors are approaching the market with caution, as evidenced by the declining futures Open Interest (OI).
Cardano’s OI dropped to $428 million on Monday and has been continuously falling since mid-March.
This drop in OI reflects waning investor participation and projects a bearish outlook.
Furthermore, ADA’s funding rates data support a negative outlook. The metric flipped to a negative rate on Saturday and has been falling sharply, to -0.019% on Monday.
This decline indicates that shorts are paying longs and suggests bearish sentiment toward ADA.
ADA could drop below the March low as bears remain in control
The ADA/USD 4-hour chart is bearish and efficient as Cardano has been underperforming over the past few days.
The near-term bias is mildly bearish as ADA trades well below the 50-day and 100-day Exponential Moving Averages (EMAs), near $0.28 and $0.33.
The Relative Strength Index (RSI) on the 4-hour chart at 30 is approaching the oversold region as bears regain momentum.
The Moving Average Convergence Divergence (MACD) line has slipped back below the signal line, suggesting growing downside momentum after a brief recovery attempt.
If the bulls regain control, they will face immediate resistance around the $0.27 psychological level.
Closing above this resistance level would allow the bulls to recapture the $0.30 region, easing the bearish tone in the near term and allowing an extended rally towards the $0.32 resistance level.
However, if the bearish trend persists, ADA would drop below the March low of $0.2462. A break below $0.22 would signal a continuation of the broader decline.
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