Karla Barker 
Cardano has been sliding for six straight sessions, and the latest liquidation data suggests leveraged traders have been caught off guard. According to CoinGlass, Cardano recorded $585,580 in total liquidations over the past day. Short liquidations were just $65,090. That left the market with an 899% liquidation imbalance, or roughly a 9-to-1 wipeout split. In plain terms, long-leveraged positions took most of the damage. That kind of lopsided liquidation can sometimes mark an exhaustion point, which is part of the reason bear trap talk has picked up.
Cardano was down 1.08% in the last 24 hours to $0.183 at the time of writing. It is also down 4.20% over the week and has dropped for six straight days since August 7. The broader crypto market is not helping either. More than $159 million in liquidations were seen across all assets as investors digested July’s consumer price index reading, which rose 0.1% month over month and matched expectations. That led traders to pare back bets on a Federal Reserve rate hike in September. Attention now turns to Thursday’s producer price index release, where economists expect a 0.2% increase.
Profit-taking signs appear
Several warning signals had already been building before this selloff. Crypto analyst Ali noted in an August 11 tweet that the number of whales holding between 1 million and 10 million ADA has fallen since the start of August. That suggests some large holders may have been taking profits after the price rally at the end of July.
The selling pressure also pushed Cardano’s MVRV ratio below its 7-day simple moving average. That is a death cross, and it is generally seen as a sign of weakening momentum. The Tom DeMark Sequential indicator flashed a sell signal on the daily chart as well.
Could a bear trap be forming?
Despite all that, the setup is not entirely bearish. A bear trap can form when the price appears to be falling, leading traders to open short positions, but then the market reverses and traps those shorts. The daily relative strength index remains above 50 at 52. That is not a loud bullish signal, but it suggests the bulls have not fully left the scene.
The risk is that bears chase the drop late and find themselves on the wrong side if Cardano suddenly turns. With momentum indicators still in positive territory, a deeper correction is possible, but a false breakdown is also possible. The next few sessions could decide which one plays out.