Is Cardano Set To Repeat History Of A Price Crash After Decoupling From Bitcoin

Cardano has faced several failed rallies recently, a pattern that typically triggers bearish reactions from traders. 

However, unlike many altcoins, a strong faction of ADA investors remains optimistic, expecting the price to rise despite these setbacks.

Cardano Is Losing Its Grip

The correlation between Cardano and Bitcoin has dropped to -0.27, indicating ADA is currently moving independently of Bitcoin’s price trends. This decoupling is concerning since Bitcoin recently hit a new all-time high (ATH), and ADA’s failure to follow could signal weakness in the altcoin’s momentum.

Historically, negative correlations like this have preceded price corrections for Cardano. If this trend repeats, ADA could face a significant price drop in the coming days.

Cardano Correlation With Bitcoin. Source:  TradingView

Despite mixed market signals, Cardano traders remain bullish, as reflected by the funding rate. Mostly positive funding rates, throughout the month, show that long contracts have been dominating short contracts. This indicates that traders expect ADA’s price to rise and are maintaining a strong bullish outlook.

This optimism contributes to an overall positive investor sentiment, which may provide some cushion against potential downward price pressure. As long as traders hold this bullish stance, ADA might avoid a sharp decline despite the current bearish undertones.

Cardano Funding Rate. Source: Coinglass

ADA Price Is Holding On

Cardano’s price is currently trading at $0.74, holding above key support levels. The mixed signals from correlation and funding rate suggest that ADA is likely to maintain this support for the near term, balancing between bullish hopes and bearish risks.

However, if bearish pressures intensify, Cardano could slip below $0.74 and test the $0.69 support level. A drop to this level would erase a substantial portion of the profits gained this month and deepen concerns about the altcoin’s near-term prospects.

Cardano Price Analysis. Source:  TradingView

On the other hand, if Cardano’s correlation with Bitcoin improves, the price could bounce off $0.74 and push toward $0.80. Such a move would invalidate the bearish thesis and signal a potential recovery, encouraging renewed investor confidence in ADA’s upward trajectory.