Cardano's cryptocurrency ADA dropped 10% in value over the past week, continuing a month-long trend below the $1 mark as large investors reduce their holdings to the lowest levels since February 2023. Technical indicators suggest strengthening bearish momentum with the Average Directional Index climbing sharply to 40.19, signaling a robust downtrend. The cryptocurrency faces a critical test at the $0.64 support level that could determine whether recovery is possible or further decline is imminent.
What to Know:
- Cardano's ADX indicator jumped from 15.83 to 40.19 in four days, indicating intensifying downward momentum
- The number of wallets holding 1-10 million ADA has decreased to 2,406, the lowest since February 2023
- Price currently tests crucial $0.64 support, with potential drop to $0.58 if this level fails to hold
Technical Indicators Signal Intensifying Downtrend
The strengthening downtrend for Cardano has become increasingly evident through technical analysis metrics. Cardano's Average Directional Index, which measures trend strength regardless of direction, has surged dramatically from 15.83 to 40.19 within just four days.
This substantial increase confirms that the current bearish pressure is not only persistent but gaining momentum.
"The ADX climbing above 40 confirms that the current downtrend is active and becoming stronger," noted market analysts familiar with the indicator's significance. The metric, which ranges from 0 to 100, typically suggests a powerful directional move when readings exceed 25.
Given Cardano's ongoing price correction, this elevated ADX reading suggests bears maintain firm control of the market. This technical development comes at a particularly sensitive time as ADA continues testing lower support levels.
Whale Investors Reduce ADA Holdings
The number of Cardano "whale" wallets—those holding between 1 million and 10 million ADA—has declined to 2,406, according to data from analytics platform Santiment. This represents a drop from 2,421 just four days ago and marks the lowest level of major holders since February 2023.
The reduction in whale numbers could signal diminishing confidence among larger investors. These substantial holders often have outsized influence on cryptocurrency prices through their trading decisions.
"Tracking whales is important because these large holders can significantly influence price action through their buying or selling decisions," explained market observers. The exodus of major investors potentially adds another layer of selling pressure to ADA's already challenged price action.
Industry analysts suggest this behavior pattern from large holders often precedes broader market movements. If the trend of whale reduction continues, it may further complicate Cardano's path to recovery in coming weeks.
Critical Support Level Under Pressure
Cardano recently tested the $0.64 support level and managed to hold this price floor, demonstrating that buyers remain active at this threshold.
Market technicians consider this price point a "key line in the sand" for ADA's immediate future prospects.
If buyers can generate sufficient momentum for a reversal, the next resistance targets would appear at $0.69, followed by a more significant barrier at $0.77. A sustained rally beyond these levels could potentially return ADA above the psychologically important $1 threshold for the first time since early March.
However, the immediate concern focuses on the stability of the current support. Should Cardano test $0.64 again and fail to maintain this level, technical analysis suggests the next support would only appear near $0.58.
"A breakdown below $0.64 would likely send ADA toward the next support at $0.58," according to chart analysts. Such a development would confirm continuation of the prevailing downtrend and potentially trigger additional selling.
Trading volumes remain relatively consistent during this period of uncertainty, reflecting cautious positioning from market participants as they await clearer directional signals.
Final Thoughts
Cardano faces mounting challenges with declining large holder numbers and strengthening bearish technical indicators. The cryptocurrency's ability to maintain support at $0.64 will likely determine its short-term trajectory, with potential for recovery above $0.77 or further decline toward $0.58 depending on upcoming price action.