ADA, the native cryptocurrency of the Cardano blockchain, slips 33% during Friday’s U.S. market hours to trade at $0.27. The selling pressure followed broader market pullback after the release of PPI data, which rose 0.5%. However, the Cardano price faces risk of further correction as derivative trading tied to its futures contract witnessed a significant drop, along with capital locked to secure the network.
Since mid-January 2026 Cardano price has been on a sharp correction from around $0.46 to its current trading range of around $0.28. Consequently, the asset market cap has plunged to $10 billion market,
ADA is now trying to hold above a key support around $0.25 – $0.26 and this has led to a period of consolidation on the daily chart. Along with weak price action, ADA’s onchain activity has recorded a notable drawdown.. According to DeFiLlama, the network’s Total Value Locked (TVL) in DeFi protocols has recorded steady downtrend since August 2025, dropping from $420 million to around $130 million recently. This indicates significant outflows from DeFi applications, caused by liquidations by many, lower ecosystem participation and less than stellar confidence from traders.
A similar trend is apparent in the derivatives market. Data from CoinGlass shows that open interest tied in Cardano’s futures contracts has plunged from $842 million to $468 million in recent sessions, accounting for a 44% drop. The initial steep reduction was due to cascading liquidations of long positions, whereas the continued decline indicates traders de-leveraging over time and reducing exposure amid continuous price decline and broader market weakness.
Overall, the combination of lower engagement on-chain and lower participation in the futures market indicates a lack of near-term momentum for a sustained recovery in ADA’s valuation.
Over the past four months, the Cardano price has witnessed a steady correction, resonating within the formation of a falling-wedge pattern in the daily chart. The two converging trendlines of the pattern acted as dynamic resistance and support for traders before price gave a decisive breakout from the upper boundary on Wednesday.
This breakout offers buyers a fresh support to gain stability at a higher level and continue its bullish recovery. With sustained buying, the post-breakout rally pushed the asset 35% up to hit next significant resistance at $0.37.
However, with today’s drop, the Cardano price rechallenged the support for a bearish breakdown. If the coin price enters the wedge pattern, the previous breakout would be marked as a bull trap.
The downsloping trend of daily exponential moving averages (20, 50, 100 and 200) accrues the broader market trend as bearish. Therefore, a potential breakdown would accelerate the selling pressure and push ADA back to bottom support of $0.24, followed by $0.2.
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