Cardano faces correction pressure despite Hoskinson's optimism

Cardano (ADA) continues to weaken with a fall of 1%, extending the decline of nearly 5% since the beginning of the week. Although the market is in a short term correction phase, Cardano co-founder – Charles Hoskinson – still holds an optimistic view, believing that ADA could outperform Bitcoin and even become a (yield layer) for the BTC ecosystem.

Hoskinson places great expectations on Cardano

In a conversation with Jason Yanowitz – co-founder of Blockworks, Hoskinson stated that Bitcoin could increase 10 times and reach 1 million USD in the coming years. However, he believes that Cardano has even greater potential, with the ability to increase by 100 to 1,000 times, equivalent to a market capitalization of 2,700 USD to 27 trillion USD. Nevertheless, the scenario of ADA surpassing Bitcoin is still considered unlikely, as BTC is increasingly being held by financial institutions and governments.

In addition, Hoskinson also emphasized the potential role of Cardano in DeFi, with the ability to provide yields through staking, yield farming, and other decentralized financial services. He revealed that the Cardano ecosystem could implement periodic airdrops for ADA holders, starting with the distribution of the Midnight token (NIGHT), in which 50% of the total supply of 24 billion tokens will be allocated to the ADA community.

The ADA derivatives market recorded a strong capital outflow

According to data from CoinGlass, the open interest (Open Interest) of the ADA derivatives contract has fallen from 1.74 billion USD to 1.51 billion USD in one week, equivalent to a net withdrawal of 230 million USD. The long/short ratio has also adjusted from 0.9272 to 0.8864 in the last 24 hours, indicating a trend of expanding short positions, currently accounting for 53.01% of the total contracts.

Open interest of Cardano | Source: CoinglassThis decline reflects the cautious sentiment of investors, amid the cryptocurrency market in general facing adjustment pressure.

Technical Analysis: ADA Faces Important Support Level

The decline of ADA is heading towards the 50-day exponential moving average (EMA 50) at the level of 0.7228 USD – an important technical support level. Previously, ADA was rejected at the resistance line formed from the peaks on 3/12 and 3/3, and also failed to approach the 50% Fibonacci retracement level at 0.9187 USD.

Daily price chart of ADA/USDT. The MACD indicator has crossed below the signal line over the past weekend, issuing a clear sell signal, while the RSI has dropped to 54, indicating that buying pressure is weakening.

On the contrary, if buying power returns, ADA may retest the resistance zone around the 0.9187 USD mark – which coincides with the important 50% retracement level.

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