Cardano (ADA) extended its decline on Monday, trading near $0.16 after losing more than 14% over the past week. The drop comes despite on-chain data showing that large holders, or whales, have been aggressively accumulating the cryptocurrency during the pullback.
Whale Accumulation Fails to Stem Losses
According to Santiment's Supply Distribution metric, wallets holding between 100,000 and 100 million ADA have collectively added approximately 320 million tokens since July 7. This sustained buying activity typically signals long-term confidence among major investors. However, it has so far failed to stabilize prices or trigger a meaningful recovery.
This divergence between whale accumulation and price action is notable. While large holders appear optimistic, the broader market remains skeptical, as evidenced by derivatives market data.
Derivatives Market Points to Bearish Sentiment
Data from CoinGlass reveals that Cardano's futures Open Interest (OI) has fallen to roughly $389 million, resuming a broader downtrend after a brief uptick in early July. Declining OI alongside falling prices suggests traders are exiting positions rather than opening new bullish bets, reinforcing a bearish outlook.
Further weakness is visible in funding rates. The Open Interest-Weighted Funding Rate for ADA turned negative on Friday and stood at -0.0028% on Monday. Negative funding rates indicate that short sellers are paying long holders, a sign that bearish positioning dominates the perpetual futures market.
Additionally, Cardano's long-to-short ratio has dropped to 0.79, one of its lowest readings in over a month. A ratio below one means short positions outnumber longs, reflecting growing expectations among derivatives traders that ADA prices could continue to fall.
Technical Analysis: Key Levels to Watch
ADA is currently trading between $0.158 and $0.160, firmly below its major exponential moving averages (EMAs), which continue to reinforce the downtrend. Key resistance levels sit at the 50-day EMA ($0.181), 100-day EMA ($0.211), and 200-day EMA ($0.280), creating a series of overhead barriers that bulls must overcome for a sustained recovery.
Technical indicators favor sellers. The Relative Strength Index (RSI) hovers near 41, indicating weak buying momentum and remaining below the neutral 50 level. Meanwhile, the Moving Average Convergence Divergence (MACD) is drifting toward the zero line, suggesting bullish momentum is fading and that any short-term rebound could face renewed selling pressure rather than signal a trend reversal.
If selling pressure persists, Cardano could revisit immediate support near $0.150, a level that has recently acted as a horizontal floor. A break below that would shift attention to the $0.138 Fibonacci support, the next major structural zone.
Context and Outlook
The current price action contrasts with earlier optimism. In a prior rally, Cardano rose 17.5% in two weeks after founder Charles Hoskinson quashed exit rumors. However, that momentum has faded, and the token now faces headwinds from both technical and derivatives perspectives.
Interestingly, the recent whale accumulation stands in contrast to a previous episode where whales dumped 190 million ADA, intensifying bearish sentiment. The current buying spree has yet to reverse the trend, highlighting the market's current risk-off stance.
Unless buying momentum strengthens significantly, Cardano's combination of bearish technical signals and weak derivatives positioning suggests the cryptocurrency may remain under pressure despite continued whale accumulation.
This article is for informational purposes only and does not constitute financial advice.
