Cardano's price has slipped below $0.220 on Monday, as traders lock in profits following last week's sharp advance. The token gained more than 24% in the previous week, buoyed by the broader crypto market's positive reaction to the US Treasury's decision to double its debt buyback operations. Such rapid moves often trigger profit-taking, and ADA now appears to be entering a consolidation phase.
Whale activity signals caution
On-chain data from Santiment reveals that large Cardano holders have begun reducing their exposure. Wallets holding between 1 million and 10 million ADA, along with those controlling 10 million to 100 million ADA, have collectively sold 100 million tokens since Saturday. This distribution suggests that some whales are capitalizing on the recent rally, potentially increasing the available supply and adding near-term pressure on the price.
The derivatives market echoes this cautious sentiment. CoinGlass data shows ADA's long-to-short ratio at 0.86 on Monday, near its lowest level in over a month. A ratio below one indicates that short positions outnumber long positions, implying that more traders anticipate a decline. While this bearish positioning does not guarantee a correction, it does support the likelihood of consolidation as the market digests last week's gains.
Technical levels to watch
Despite the selling pressure, Cardano's technical structure remains constructive. ADA is trading above its 50-day and 100-day Exponential Moving Averages (EMAs) at $0.187 and $0.196, respectively. Holding above these levels supports a bullish near-term outlook. The token has also reclaimed the 50% Fibonacci retracement level near $0.213, which now serves as immediate support.
The Relative Strength Index (RSI) stands near 60, indicating strong buying momentum but also placing ADA close to overbought territory, raising the risk of a temporary pullback. The Moving Average Convergence Divergence (MACD) indicator remains above its signal line and in positive territory, with an expanding histogram suggesting that bullish pressure has not yet disappeared.
On the upside, Cardano's first significant resistance sits at the 61.8% Fibonacci retracement level of $0.231. A breakout above that level would bring the horizontal resistance at $0.236 into focus, followed by $0.245. The 200-day EMA at $0.249 represents the strongest barrier within this cluster. A sustained breakout above that level would confirm a broader recovery, potentially extending the rally toward $0.299.
On the downside, the recent breakout level near $0.213 provides the first line of support. A close below that area could expose the convergence of the 100-day EMA at $0.196 and the 38.2% Fibonacci retracement near $0.195. Further selling might push ADA toward the 50-day EMA at $0.187, followed by structural support at $0.173. Below those levels, traders may watch the former trendline resistance near $0.164 and the horizontal base at $0.150.
Cardano's broader short-term outlook remains bullish as long as ADA holds above $0.195. However, the combination of whale selling, bearish derivatives positioning, and an elevated RSI increases the likelihood of consolidation before the next directional move. Investors may also keep an eye on the broader crypto market, as recent Treasury buybacks and short squeezes have fueled a $190B rally across digital assets.
For context, other cryptocurrencies have also experienced volatility. Ethereum recently surged 25% amid a record short squeeze and ETF inflows, while Coinbase stock jumped 8% as political support for crypto legislation grew. These developments highlight the interconnected nature of the market, where regulatory news and macroeconomic factors can quickly shift sentiment.
As Cardano navigates this period of profit-taking, traders will be watching whether the token can maintain its key support levels. A successful hold above $0.195 could set the stage for another attempt at higher resistance zones, while a break below could signal a deeper correction.
This article is for informational purposes only and does not constitute financial advice.
