Cardano's ADA token is trading near a critical support zone on Monday, following a weekly decline of more than 10%. The sell-off is being driven by significant distribution among the cryptocurrency's largest holders, with on-chain data revealing that wallets holding between 1 million and 100 million ADA have collectively reduced their positions by approximately 200 million tokens since August 11.
This reduction in whale holdings suggests that some of Cardano's most influential investors are de-risking as the token hovers around the $0.173 support level. While smaller whales—those holding between 100,000 and 1 million ADA—have accumulated roughly 10 million tokens over the same period, this buying activity represents only a fraction of the supply distributed by larger wallets. The imbalance indicates that demand from smaller investors has not been sufficient to absorb the selling pressure from top-tier holders.
Derivatives Market Reflects Bearish Sentiment
The derivatives market also points to weakening confidence among traders. According to CoinGlass, ADA's long-to-short ratio stands at 0.92, near its lowest level in over a month. A ratio below one indicates that short positions outnumber long positions, suggesting that traders are increasingly positioning for further price declines.
Additionally, ADA's Open Interest-weighted funding rate turned negative on Sunday and remained at -0.0018% on Monday. A negative funding rate means short-position holders are paying long-position holders, a typical sign of bearish sentiment in perpetual futures markets. This aligns with the broader cautious outlook among derivatives traders.
Technical Analysis: Key Levels to Watch
From a technical perspective, Cardano is trading at approximately $0.175, below several important Exponential Moving Averages (EMAs). The 50-day EMA at $0.179 provides immediate resistance, while the 100-day EMA at $0.194 aligns closely with the 38.2% Fibonacci retracement level at $0.195, creating a formidable resistance cluster. ADA's inability to reclaim these levels keeps the short-term outlook bearish, and any attempted recoveries could attract renewed selling pressure.
The Relative Strength Index (RSI) remains below the neutral level of 50, currently at 35, indicating that sellers maintain a momentum advantage. The Moving Average Convergence Divergence (MACD) indicator is also in negative territory, reinforcing the cautious technical picture.
Immediate support is identified at the 23.6% Fibonacci retracement level of $0.173, an area that also coincides with a previous trendline breakdown, increasing its technical significance. A daily close below this support zone could confirm a continuation of the decline, potentially exposing the strategic horizontal support level at $0.150.
On the upside, a sustained break above the 50-day EMA at $0.179 would be the first sign that selling pressure is easing. However, Cardano would still need to overcome the $0.194–$0.195 resistance cluster to strengthen its recovery prospects. A successful breakout could bring higher resistance levels at $0.213 and $0.231 into focus. Even in that scenario, the medium-term outlook would remain constrained, with the 200-day EMA at $0.249 representing a major obstacle to a broader bullish reversal.
For context, similar whale distribution patterns have been observed in other cryptocurrencies. For instance, Ethereum whales have accumulated 100K ETH while its price remains stuck below $2K, and Dogecoin whales have accumulated 180M tokens amid a bullish divergence. These contrasting behaviors highlight the varying dynamics across digital assets.
As Cardano approaches this pivotal support level, market participants will be closely monitoring whether the $0.173 level holds or gives way. A decisive break could trigger further downside, while a rebound would depend on whether buying interest can absorb the ongoing whale distribution.
This article is for informational purposes only and does not constitute financial advice.
