ADA’s strength wanes due to tariff concerns and increasing short positions
February 24, 2026
ADA has witnessed a decline in value, dropping over 2% and struggling to maintain support at $0.2563 due to increasing short positions and bearish sentiment influenced by macroeconomic factors like US tariff discussions. The futures Open Interest for ADA has decreased by 3%, indicating capital withdrawal and a bearish bias in the market.
The entire cryptocurrency market experienced a bearish weekend, with major coins like Bitcoin, Ether, and XRP also facing declines. Nearly $500 million worth of leveraged positions were wiped out within 24 hours, contributing to the overall negative performance. ADA, specifically, saw a drop of more than 2% on Monday, marking its third consecutive day of decline.
The downturn in ADA’s value is largely attributed to the strong bearish bias in Cardano’s derivatives market positional buildup. This market dump was primarily due to US President Donald Trump’s reevaluation of global tariffs and internal conflicts with the US Supreme Court. Although technical indicators currently point towards a bearish trend, there is a possibility of a temporary pump in ADA’s near-term future.
As of now, ADA has slipped out of the top 10 and occupies the 11th position in the market. It is down by almost 3% in the last 24 hours, affected by shifting macroeconomic conditions in the cryptocurrency market. Retail participation has dwindled, with CoinGlass reporting that ADA futures Open Interest stands at $446.84 million, indicating a 3% decrease over the previous 24 hours, reflecting significant capital withdrawal amidst a risk-off sentiment among traders.
Moreover, the market shows a bearish bias with a long-to-short ratio of 0.8619, suggesting an increase in active short positions. ADA’s funding rate has dropped to -0.0138%, reflecting an elevated interest among traders in taking short positions. This level of selling pressure, with a funding rate below 1, could see the bulls bolster their positions in the near future.
The support level at $0.2563 for ADA has been held by the bulls over the last 24 hours, but the coin remains under pressure. Currently trading at $0.2706, ADA is below the 50-period Exponential Moving Average (EMA) at $0.2773 and the 200-EMA at $0.3013. The 50-period EMA is beneath the 200-period EMA, signaling downward pressure on the coin.
If the bearish trend persists and ADA closes below the $0.2563 support level, further decline towards the February 6 low at $0.2205 could be expected. The Relative Strength Index (RSI) at 45 on the 4-hour chart has dropped below the neutral zone, indicating an increase in selling pressure. Additionally, the Moving Average Convergence Divergence (MACD) is plummeting below the zero line, confirming the rise in bearish momentum.
However, if the bulls maintain the support level and the daily candle closes above the $0.2695 resistance, ADA could test the 50-day and 200-day EMAs at $0.2773 and $0.3013, respectively.
