Bearish outlook for ADA below $0.50

Disclaimer: This is not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results.

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Market context

ADA has been in a clear downtrend after failing to sustain its post-Crypto Summit move, confirming our bearish outlook. The initial move higher lacked fundamental backing, and the price has now broken down, moving toward our $0.60 - $0.50 target.

The market remains risk-off, and with liquidity constraints, ADA has struggled to find meaningful bids. However, with the softer-than-expected CPI print, we could see a short-term bounce across the market, including ADA.

While CPI has not yet triggered an immediate reaction, it may act as a temporary relief catalyst in the coming days. If the price moves higher into key resistance, we will look to capitalise on the short side, as broader market conditions still favour the downside over sustained bullish continuation.

Technical analysis & market mechanics

• Short Opportunity Zone: Price has now broken below key levels, shifting our focus to the $0.80 - $0.90 region as a potential short re-entry zone. If the price trades back into this area, we will be closely monitoring the price action for signs of exhaustion and confirmation to build short positions.
• Key Resistance: $0.80 - $0.90 now serves as a key resistance level after the breakdown.
• Bearish Structure break: If the price breaks below $0.600, we could move into the wick formed around $0.5150 before breaking down fully to our long-term zone at $0.36.
• RSI & Momentum: The RSI is currently sitting at the midpoint, showing no extreme overbought or oversold conditions. This signals that price action is balanced but fragile, meaning further downside is still very much on the table if ADA rejects from resistance.
• Downside Targets: If the price plays into the developing head and shoulders structure and breaks down from the $0.80 - $0.90 resistance, our next long-term target would be $0.40, aligning with historical liquidity zones and prior market structure.
• Market Conditions & Volatility: With sentiment-driven price action causing erratic movements, ADA remains more attractive for sell-side plays on rejections rather than structured long opportunities at this stage.

• Next Support: $0.600
• Next Resistance: $0.820
• Direction: bullish
• Upside Target: $1.000
• Downside Target: $0.500

Trade plan: potential short re-entry

• If the price pushes into $0.80 - $0.90, we will enter shorts with stops at $0.95 and targets at $0.60, then $0.40.
• If the price fails to rally and breaks $0.60, the next short entry will be a retest of $0.60 as resistance.
• Risk Management: No trade until the price reaches our shorting zone.
• If the price breaks below $0.50 without a bounce, we stay patient and reevaluate.

Cryptonary's take

ADA remains a structurally weak asset, and we continue to favour the short side. The CPI print has not yet triggered a reaction, but it may cause a short-term bounce, which we will look to capitalize on if the price moves into our resistance zone at $0.80 - $0.90. Given the nature of ADA's recent breakdown, any rally is more likely to be an opportunity to position for further downside rather than a trend reversal.

Our expectation is that the price grinds higher in the short term before rolling over into a deeper downside, ultimately targeting $0.40 as a long-term play. We remain patient, allowing the market to set up the optimal short entry rather than chasing price action prematurely.