Cardano Price Struggles Amid Market Sell-Off and Whale Activity

NEW YORK, NY — Cardano’s cryptocurrency, ADA, has experienced a significant decline, dropping 7.6% in the past 24 hours. This slump comes amid broader volatility in the cryptocurrency market and follows a notable rally earlier in July.

Despite this decline, ADA has seen a 28.6% gain over the past month. Traders now find themselves caught in a tug-of-war between optimism from retail investors and the bearish actions of major market players, often referred to as super whales.

Recent on-chain data reveals that wallets holding over 1 billion ADA have reduced their holdings from 5.43% in late June to 5.02% now. This decrease, though seemingly small, reflects a bearish sentiment from these powerful investors.

Additionally, there has been a sharp drop in active addresses on the Cardano network, decreasing by over 40% since hitting a peak of 42,000 on July 18. This decline occurred just before ADA reached its local top of $0.92.

While whales are trimming their stakes, retail traders are staying bullish. The flow of ADA from exchanges has been negative for several months, suggesting more holders are accumulating than selling, typically a positive sign for price movement.

However, traders in derivatives markets are betting against ADA. According to Bitget’s liquidation map, there is $141.7 million in short positions compared to just $74 million in long positions, signaling a bearish outlook among these traders.

If whale selling continues, it could lead to further price declines, pushing ADA down to crucial support levels at $0.71 and $0.68. A breakdown below these levels could lead to a drop to $0.62, where significant long positions might face liquidation.

Conversely, if bullish momentum returns and ADA breaks past resistance at $0.73 and $0.78, it could set a path towards $0.84 and $0.93, potentially liquidating the existing short positions.

As it stands, the cryptocurrency market faces a critical crossroads, where the interactions between whales, retail traders, and derivatives traders could determine Cardano’s next significant move.