Cardano (ADA) is facing renewed selling pressure as traders brace for more downside before any meaningful recovery. After dropping nearly 27% this week, the cryptocurrency has slipped below crucial support at $0.66. The broader market’s risk-off sentiment—driven by Bitcoin’s pullback and declining altcoin liquidity—has further intensified bearish momentum.
According to on-chain and derivatives data, large holders remain cautious, reducing their exposure as uncertainty clouds ADA’s near-term path. Analysts suggest that while a rebound toward $1 remains possible later this quarter, the token might still test lower levels first.
Whale Activity Shows Mixed Sentiment
Data from Santiment reveals that major Cardano wallets have taken opposing positions over the past week. Wallets holding between 1 million and 10 million ADA sold roughly 40 million coins, contributing to the recent drop. Meanwhile, another group of large investors accumulated between 140 million and 200 million ADA, creating a tug-of-war that has left prices consolidating in a narrow range between $0.65 and $0.70.
This split behavior among whales signals uncertainty over ADA’s immediate direction. The selling from long-time holders has added supply to the market, while selective accumulation from other addresses suggests some investors see current prices as a long-term buying opportunity.
Derivatives Data Hints at Caution
Open interest in Cardano futures declined by around 2.1% to $669.9 million, reflecting waning trader enthusiasm. More concerning is the imbalance in liquidations—long positions worth $1.13 million were wiped out compared to just $187,000 in short liquidations. This indicates that bullish traders were caught off guard by the latest dip.
Technical indicators on shorter timeframes add to the cautious mood. On the 4-hour chart, ADA appears to be forming a falling wedge pattern, often considered a bullish reversal signal. However, confirmation requires a clean breakout above $0.74, which has so far acted as strong resistance. Until that happens, momentum indicators remain subdued, with the Relative Strength Index (RSI) at 37—nearing oversold territory—while the Chaikin Money Flow (CMF) between 0.12 and 0.15 suggests some returning buying pressure that has yet to dominate selling forces.
Potential Scenarios: Short-Term Pain, Long-Term Gain
Analysts warn that ADA’s immediate outlook remains fragile. Losing support at $0.66 could open the door to further declines toward $0.62 or even $0.57 if broader crypto weakness persists. The next major technical level sits around $0.53, where prior structure and volume converge.
However, a reversal remains on the table if Cardano manages to reclaim $0.66 and then break above the $0.74–$0.80 zone, which aligns with its 50-day exponential moving average (EMA). Surpassing this cluster would strengthen bullish momentum, setting the stage for targets at $0.86 and potentially a retest of $1.00 by late Q4.
Some market strategists remain optimistic about ADA’s long-term trajectory. They highlight that if macro conditions stabilize and Bitcoin regains footing, Cardano could see a renewed rotation of capital from major crypto assets back into altcoins. In such a scenario, ADA could aim for a broader recovery toward $1.20–$1.60.
Still, most agree the market may need a deeper reset before that happens. With leverage being flushed out of derivatives markets and liquidity uneven across exchanges, a cautious approach appears prudent in the near term.
Upcoming Catalysts: ETF Decision and Market Flows
One potential catalyst for renewed interest in ADA is the upcoming decision window for the Grayscale Cardano Trust, scheduled for October 23. While no guarantees exist, any progress in ETF-related developments could improve sentiment around ADA as institutional products continue to expand across the crypto market.
Stablecoin and ETF net flows will also play a key role in determining whether ADA can sustain a rebound. If large holders begin to reduce selling pressure and stablecoin inflows strengthen, the market could see a shift toward accumulation heading into November.
On the other hand, if Bitcoin continues to face selling pressure and overall risk appetite remains low, Cardano may extend its consolidation phase near current lows.
Ecosystem Growth Remains a Bright Spot
Despite short-term price challenges, Cardano’s on-chain fundamentals continue to show resilience. The project’s community treasury has now exceeded 1.6 billion ADA, worth over $1 billion at current prices. This treasury, funded through transaction fees and staking rewards, is managed via Cardano’s decentralized governance initiative, Project Catalyst.
These funds serve as a critical backbone for supporting ecosystem growth—funding infrastructure, DeFi platforms, and developer tooling without reliance on traditional venture capital. This structure not only strengthens Cardano’s long-term sustainability but also highlights its community-driven nature.
Furthermore, Cardano’s staking participation remains among the highest in the industry. A significant portion of ADA’s circulating supply continues to be staked, reflecting holder confidence in the network’s long-term viability.
Broader Market Context
The recent pullback in ADA mirrors the broader weakness seen across the crypto market. Bitcoin’s decline toward the $104,000 level has affected liquidity across altcoins, leading to sharper price swings and tighter trading ranges. With risk sentiment subdued and U.S. bond yields rising, speculative assets like cryptocurrencies are facing near-term headwinds.
Nevertheless, analysts emphasize that volatility in the crypto sector often precedes major trend shifts. Historically, ADA has experienced similar corrective phases before staging notable recoveries when liquidity and investor sentiment improved.
The Bottom Line
While Cardano’s short-term outlook remains uncertain, the broader narrative still points to a potential recovery once market conditions stabilize. Analysts agree that the path to $1 will likely be gradual and may require ADA to test lower supports before any sustainable rebound takes hold.
With strong treasury reserves, ongoing ecosystem growth, and steady staking participation, Cardano retains a solid foundation that could support a recovery in the coming months. However, for now, traders and investors are watching key levels—$0.62 on the downside and $0.74 on the upside—to determine where ADA heads next.
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