Cardano (ADA) has been on a downward trend since September 27, currently trading at $0.34, reflecting a 15% drop. The 11th-largest cryptocurrency by market cap is now close to a critical support level at $0.32.
The technical setup indicates the potential for further decline, especially with decreasing whale activity, which could push ADA below this key level.
Cardano whales retreat
Data from IntoTheBlock shows a significant decline in Cardano whale activity over the past month. Over the past 30 days, ADA whales or large investors have been increasingly selling their coins, as evidenced by the 100% drop in netflow from large holders.
In short, large holders refer to addresses that own more than 0.1% of an asset’s circulating supply. Their netflow refers to the difference between the amount of the coin these addresses are buying and the amount they are selling.
Read more: How to Buy Cardano (ADA) and Everything You Need to Know
When netflow decreases, it means that large investors are selling more coins than they are buying. This signals a loss of confidence in the coin’s future, often leading retail investors to sell their holdings, which further drives the price down.
Netflow of Large Cardano Holders. Source: IntoTheBlock
The decline in ADA whale concentration over the past month confirms their selling activity. On-chain data shows that their share of the coin’s circulating supply has decreased by 0.38% over the past 30 days.
Interestingly, over the same period, retail traders saw their share of ADA supply increase by 0.27%. However, this is not a positive for ADA.
Historical Cardano Concentration. Source: IntoTheBlock
As whale activity decreases and retail trader involvement increases, ADA may experience greater price volatility. Retail traders often have less influence on the market individually, but can create price fluctuations through smaller, more frequent trades.
ADA Price Prediction
A continuation of the decline in whale trading activity could push Cardano (ADA) price towards the critical support level of $0.32. If the bulls fail to defend this support, and fresh demand for the altcoin fails to materialize, the support is likely to collapse, sending Cardano price to its August 5 low of $0.27.
Read more: Earn Cardano – Learn how to stake ADA
Cardano Price Analysis. Source: TradingView
However, this bearish outlook would be invalidated if ADA manages to hold onto support and initiate a recovery. A sustained recovery could put the altcoin on track to reach $0.48, a high last seen in June.
The article Whales Reduce Activity and Cardano (ADA) May Lose Support appeared first on BeInCrypto.
