Cardano (ADA) is nearing a critical technical level after a 2.5% decline, testing a major high time frame support zone that could determine the direction of its next move. The area around $0.49 is now in focus, acting as a potential springboard for a bullish reversal if buyers defend it convincingly.

$0.49 Zone Marks Critical Technical Confluence

The $0.49 level is more than a standard support—it marks the convergence of several key indicators, including a prior swing low and the value area low of the broader trading range between $0.49 and $1.19. ADA has bounced off this zone multiple times in the past, making it a high-probability area for renewed demand.

Price action suggests the current dip may be a controlled correction rather than a breakdown. As long as ADA holds above the point of control (POC), the uptrend remains structurally intact, with higher lows still forming. If the level is lost, however, sentiment could shift, potentially invalidating the bullish structure.

Deviations and Liquidity Sweeps Could Precede Rebound

Traders should also watch for a deviation setup—where price momentarily dips below $0.49 to sweep liquidity before sharply recovering. Such patterns often trap late sellers and trigger rapid reversals as demand re-enters the market. If this scenario plays out, ADA could resume its upward trajectory toward the range highs near $1.19.

Volume remains light, indicating a lack of conviction in either direction for now. Without a major catalyst, ADA may continue to range between established support and resistance levels. A firm defense of the $0.49 zone would set the stage for a potential bullish rotation, while failure to reclaim it could lead to structural breakdown. Traders should prepare for short-term volatility as ADA decides its next path.

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