Cardano (ADA) is down 9% this week, with whales’ increasing accumulation drawing attention. This could be a promising signal for the price to head towards a potential recovery.
Despite the decline, retail investor participation is decreasing as large investors (whales) position themselves for a possible price recovery. According to data shared by Santiment, there is a noticeable increase in large wallets holding ADA tokens. This shows that whales are making strategic accumulations despite market uncertainty and have an optimistic expectation for the longer term.
Cardano’s price has been facing significant challenges recently. ADA is facing strong resistance at $1.12 and is currently trading around $1.10. This could be interpreted as a pullback reflecting the general market decline. The Relative Strength Index (RSI) is currently at 58.66, suggesting neutrality; if buying interest picks up again, upward momentum could begin. Additionally, ADA’s price is trading above its 200-day moving average at around $0.77, indicating bullishness.
In particular, the "golden cross" formed by the 50-day moving average crossing the 200-day moving average is considered a bullish signal. However, continuous failures to break the $1.12 resistance raise questions about the sustainability of the rise.
On-chain data shows a significant increase in accumulation among whales holding between 10 million and 100 million ADA tokens. The increase in these large wallets reinforces the confidence of large investors in Cardano and indicates strategic accumulation against a price decline. Such accumulation is often considered a bullish signal during market corrections, as whales usually expect a long-term rally.
In contrast to whale activity, there has been a significant decline in retail investor participation. There was a significant increase in active addresses in late November, but this number has since fallen to around 266,000 active addresses. This suggests that small investors are becoming less effective in driving ADA’s price increases and could potentially limit future price movements. Complicating the market dynamics is the decline in retail participation despite whale accumulation, suggesting that large investors are anticipating a recovery, while retail investors are cautious due to market uncertainties.
Cardano’s market situation is currently in a delicate balance. Whale accumulation could trigger a price increase, but it is also important for retail investors to regain confidence. If the price can break above the $1.12 resistance, the possibility of ADA heading towards $1.20 levels could increase.
However, if retail investor interest remains subdued and resistance levels remain intact, ADA could be likely to pull back deeper and test the critical support level at $0.90, which has historically been a key area for price reversals.
Cardano’s immediate future will be shaped by these evolving trends. As major investors continue to strengthen their positions, the big question is: will retail participation revive or will the current downtrend dominate the market narrative?