Cardano's ADA experienced an impressive 11% surge in a single day following the news that Grayscale Investments had filed for the inaugural spot exchange-traded fund (ETF) in the US.

Despite the initial excitement, the momentum behind the rally was short-lived, with ADA now trading at $0.76, marking a 4% decrease from its recent highs.

The anticipation around the Cardano ETF undoubtedly played a significant role in the price appreciation, propelling ADA to $0.82 before retracing back to its current levels.

While the price has retraced, the trading volume for ADA has notably increased, reaching $1.44 billion, signaling heightened market activity. However, the surge in trading volume alongside the price decline may indicate a growing number of traders selling off their holdings, suggesting a bearish sentiment in the market.

The negative Balance of Power (BoP) further supports the notion of increased selling pressure, with the indicator currently standing at -0.54, emphasizing the dominance of sellers in the market.

Looking ahead, ADA faces a pivotal moment as it hovers around the $0.70 mark, with a potential downside target of $0.53 if the current levels fail to hold. However, a renewed surge in investor accumulation and positive market sentiment could see ADA rally back to $0.82, reclaiming its recent highs.