Are whales losing faith in ADA's price?

Cardano (ADA) has experienced a slight price recovery, offering a rare positive signal amid the current challenging environment. However, this price increase is only temporary and does not address the deep structural issues weighing heavily on ADA.

For nearly three weeks, the behavior of large investors (whales) in the Cardano market has remained largely unchanged, continuing to suppress the recovery momentum of this altcoin.

Declining Confidence from Whales

Since February 24, whales have been continuously selling off ADA. Specifically, wallet addresses holding between 10 million and 100 million ADA have sold a total of approximately 380 million ADA, valued at over $103 million during this period.

The three-week-long sell-off indicates a significant decline in confidence among major investors—those with the greatest influence on ADA’s market.

Large-scale whale sell-offs are often a warning sign of more severe declines ahead. This occurs when retail investors interpret whale withdrawal actions as negative signals. Moreover, the continuous and unbroken nature of this sell-off suggests that large investors have significantly changed their outlook on ADA’s short-term recovery prospects.

Cardano Whales | Source: Santiment The realized profit/loss index also shows that most investors are currently experiencing unrealized losses, reflecting the substantial price decline of ADA in recent times. Widespread losses have created a difficult psychological environment, hindering buying activity.

Notably, despite being in loss, investors continue to sell off. This behavior is typical of panic-driven psychology, where they accept losses to avoid further risk of greater losses. This fear-driven mentality further increases selling pressure, making it extremely difficult to establish a sustainable recovery without a major shift in market sentiment.

Realized Profit/Loss of Cardano | Source: Santiment

Recovery Outlook for ADA Remains Distant

Currently, Cardano’s price hovers around $0.264, below the resistance level of $0.269 and above the support level of $0.254. Additionally, ADA is trading below the 20-day Exponential Moving Average (EMA), a clear bearish signal indicating that the downtrend is still ongoing. ADA’s technical structure remains weak across multiple timeframes.

If whale sell-offs and retail panic continue, ADA risks dropping to the support level of $0.254. Breaking this support could lead to further declines toward $0.243, increasing losses for investors already in the red.

Conversely, to reverse the downtrend, ADA needs a strong rebound, surpassing the resistance of $0.269 and aiming for $0.285. Achieving this milestone could reduce selling pressure and open opportunities for a more sustainable recovery. However, given the current situation, this scenario still seems distant as the market shows no significant signs of improvement.

Cardano Price Analysis. | Source: TradingView

In summary, although Cardano has shown slight upward movement, the outlook for a solid recovery remains hindered by selling pressure from large investors and prevailing market panic. A positive shift in investor confidence is crucial for this altcoin to break free from its current downtrend.