The cryptocurrency market is undergoing a correctional phase, with liquidations surpassing $335.91 million in the past 24 hours. To be specific, long positions have taken the brunt of the hit, accounting for $225.52 million of the total liquidations. On the other hand, the industry’s market valuation has now slipped below $3.3 trillion, undoing much of the early gains that defined the year and casting doubt on its short-term recovery.

Amid this broad market downturn, Cardano (ADA) has emerged as one of the hardest-hit assets, struggling to resist the sweeping bearish sentiment. At the time of writing, the cryptocurrency has tumbled 8% over the past week, trading at $0.9667. This continued descent extends its recent streak of lower price levels, highlighting mounting vulnerabilities within the broader crypto ecosystem. Will ADA find its footing, or does the market have more challenges in store?

Sellers Reclaim Control as ADA Slips Below $1

Optimism surged earlier this week as the Cardano token clung to the critical $1 mark, fueling hopes for a rally toward the $1.30 resistance. However, the tide shifted on Tuesday as sellers regained dominance, dragging the price below $1. As a result, the daily MACD paints a concerning picture, with its line at 0.003639 dipping close to the signal line at 0.003857.

Supposing this momentum persists, a looming bearish crossover seems inevitable, which could trigger further downward pressure. Adding to the bearish narrative, the RSI has slipped below the neutral 50 level, resting at 48.69. This shift underscores the strength of the sellers and signals room for more declines if bearish sentiment remains unchecked.

However, all eyes are on the $0.91 support level, which coincides with the 23.6% Fibonacci retracement. A break below this critical threshold could set the stage for a deeper correction, with $0.76 emerging as the next line of defense. Besides, the broader trend isn’t offering much relief.

This is evident as ADA’s buy volume peaked in December last year and has been waning since, forming lower highs—a classic sign of bearish control. Without a resurgence in buyer interest, the token’s path to recovery looks challenging. The question now is whether the bulls can defend the $0.91 zone and prevent a deeper slide or if the bears will tighten their grip even further.

Cardano’s Daily Activity and TVL Tumble

Data from Artemis reveals a downturn in user activity on the Cardano blockchain. Since early December, daily active addresses have dropped from 96.7K on December 3 to just 38.2K as of January 9. This decline in engagement has been mirrored in daily transactions, which have slid from 144.3K to a mere 55.0K over the same period.

Adding to the concerning trend, Cardano’s total value locked (TVL) has seen a steep erosion. According to DefiLlama, the network’s TVL has tumbled by over 28.76%, sliding from $701.4 million on December 3 to approximately $499.66 million at the time of reporting. The most alarming drop occurred between January 7 and January 9, when TVL plummeted by $109 million—an 18% drop in three days.

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