Cardano (ADA) experienced further declines, trading below $0.160 on Monday, following a drop of over 14% in the previous week. While on-chain metrics reveal ongoing accumulation by large holders, or whales, their buying activity hasn’t been enough to elevate prices. Coupled with bearish indicators from derivatives and a weak technical backdrop, the outlook for ADA seems to lean toward more losses.
Whale Accumulation Can’t Prevent Price Decline
Data from Santiment shows that major wallet holders have been buying ADA during its recent downturns, which could imply a supportive future for the asset. Whales owning between 100,000 to 1 million ADA (red line), 1 million to 10 million ADA (yellow line), and 10 million to 100 million ADA (blue line) collectively acquired around 320 million ADA since July 7. This trend suggests a continued long-term interest among big investors, although it hasn’t translated into short-term price stability.
Bearish Sentiment Among Derivatives Traders
Derivatives indicators currently reflect a bearish sentiment towards Cardano. The futures open interest (OI) for ADA decreased to $385 million on Monday, having steadily declined following a slight uptick in early July. This drop in OI amidst falling prices hints at a pessimistic outlook.
Moreover, funding rate data from CoinGlass also signals bearish sentiment. The ADA OI-weighted funding rate turned negative on Friday, registering at -0.0028% on Monday. Such a negative funding rate suggests that traders taking short positions are paying those with long positions, indicating a bearish mindset.
Additionally, Coinglass reported that the ADA long-short ratio was at 0.79 on Monday, close to its lowest point in over a month. This figure, being under 1, reflects a broader market inclination toward expecting declines in ADA prices.
Price Prediction: Continued Losses for ADA
ADA is trading at $0.158 on Monday, marking a loss of more than 14% in the previous week. It remains in a bearish state in the short term, comfortably sitting below significant exponential moving averages (EMAs). The 50-day EMA is around $0.181, while both the 100-day EMA and a crucial downtrend line break area hover around $0.211. The 200-day EMA is situated at $0.280, all acting as layered resistance.
The Relative Strength Index (RSI) is near 42, and the Moving Average Convergence Divergence (MACD) line is approaching zero. Together, these trends suggest that any potential price rebounds may see increased selling pressure instead of initiating a solid reversal.
Looking upward, immediate resistance is noted at the 23.6% Fibonacci retracement around $0.173, followed by the 50-day EMA at $0.181 and the 38.2% Fibonacci retracement near $0.195. Further resistance can be found around $0.211, where the 100-day EMA aligns with the previous trendline break area, posing a significant challenge, followed by static resistance at $0.236 and $0.245. The broader upper bounds are set at $0.280 and $0.299.
On the other hand, immediate support appears around the recent low at $0.150, with the Fibonacci anchor near $0.138 providing a more substantial base if selling resumes.
