Cardano's Rejection at $0.25 Triggers Cautionary Signals for Bulls

Cardano's recent price action has left traders wondering what's next for ADA. After hitting $0.25, the cryptocurrency saw a sharp rejection and is currently down 5% in the past 24 hours.

The bulls are still in control, as evidenced by the 20% rally over the past week and nearly 30% gain in a month. However, the trend may be reversing, at least temporarily.

According to Coinalyze, the selling pressure in recent hours was not extreme, with Open Interest slumping by 6.5% and spot CVD seeing a slight slump. This suggests that the market sentiment is still bullish, but willing to remain cautious.

The price structure and magnetic zones indicate that Cardano may be due for an extended retracement phase. The $0.25 resistance zone was a local high made during the sell-off in May, and its rejection could lead to a deeper correction.

A strong move higher on big volume and a quick throwback signal a short squeeze, which is exactly what happened when Cardano prices rallied hard to reach the $0.25 area in August. The OBV was nearing the mid-August lows again, signaling heavy sell pressure during the latest rejection.