On Feb. 6 (all times local), Cardano (ADA) recovered to $0.25 after rebounding 17 percent from a 20 percent plunge, but the bearish market is still continuing, blockchain outlet BeInCrypto reported.

After falling nearly 20 percent on Feb. 5 and breaking out of a descending channel, ADA rebounded quickly and climbed back to $0.25. But market sentiment remains negative. Since mid-January, positive sentiment has plunged 90 percent, falling from around 57 to 6, weakening the optimism that had underpinned Cardano’s bullishness.

As the price rebounded, positive sentiment continued to fall, showing that narratives among retailers and the media remain cautious. The gap indicates the rally is still being driven by positioning and capital flows rather than broad optimism, the report said.

At the same time, open interest in the derivatives market dropped sharply, reducing leverage risk, while whale investors continued to accumulate during the downturn. Whales holding 10 million to 100 million ADA have bought an additional roughly $40 million worth of ADA since early February. But to keep gains going, ADA must break above $0.26. If support at $0.22 breaks, the price could fall further to $0.20.

At current levels, ADA needs to hold $0.24 and regain $0.26 to maintain momentum. A break above $0.26 could lift it to $0.30, implying about 20 percent upside. But the report said the rally could be hard to sustain if positive sentiment does not recover.

If ADA falls below $0.22 and sentiment stays at a monthly low, or negative news emerges, the rebound is likely to fade. In that case, $0.20, the initial target from the channel breakdown, could come into view, the outlet reported, adding that it remains part of broader technical risks.