Cardano (ADA) Faces Steep Decline as Bearish Trend Strengthens

Cardano faces steep decline: ADA has dropped over 25% in the past week, with trading volume down 35%, reflecting decreased market activity and growing bearish sentiment.
Strong downtrend persists: Cardano’s Average Directional Index (ADX) rose sharply to 41.6, indicating a powerful bearish trend, though slight stabilization suggests potential weakening of selling pressure.
Whale activity stabilizes: Large ADA holders have maintained steady positions over the past three weeks, suggesting a period of balance as whales wait for clearer market direction before making major moves.

The price of Cardano (ADA) has taken a heavy hit, dropping more than 25% over the past week and bringing its market cap down to $26 billion. Trading activity is also in decline, with a 35% drop in volume over the last 24 hours, leaving it at $766 million. This reflects a significant slowdown in market activity and growing caution among investors.

Meanwhile, large ADA holders—whale addresses—have stabilized after a brief surge, signaling that these investors may be waiting for clearer market signals before making their next move.

ADX Indicates Strong Downtrend

Within just five days, Cardano’s Average Directional Index (ADX) jumped from 11.2 to 41.6. For context, an ADX above 25 typically signals a strong trend, though it doesn’t indicate direction. In this case, the trend is bearish, aligning with ADA’s 20% price correction during the same period.

Despite hovering around 41-42 for the past two days, suggesting the trend may be losing some steam, there’s no clear sign of reversal yet. If the ADX continues to decline while prices stabilize, this could hint at weakening selling pressure and possible consolidation ahead. However, for now, the downside risks remain high.

Cardano Whale Activity Levels Off

Between January 9 and January 14, the number of Cardano whale addresses (holding 1-10 million ADA) rose from 2,453 to 2,483. Since then, the number has declined slightly and has remained stable, fluctuating around 2,469 for the past three weeks.

Tracking whale activity is crucial because changes in large holders’ behavior often signal market shifts. An increase in whale addresses can point to growing confidence and price support, while a decrease may reflect selling pressure. Currently, the lack of significant movement suggests a period of balance, with whales neither aggressively buying nor selling.

Some analysts speculate that these whales may be focusing on other opportunities in the market for now, particularly with February’s potential for gains in other assets. If this stability continues, ADA could enter a consolidation phase, awaiting further catalysts for major price movement.

ADA Price Prediction: A 55% Swing Potential

Cardano is currently trading between $0.65 (support) and $0.82 (resistance). However, its EMA lines show a bearish structure, with short-term EMAs positioned below long-term ones—reinforcing the prevailing downtrend.

If ADA can break out above $0.82, it might target $1.03 or even $1.16, offering a potential 55% upside. Conversely, if the bearish momentum persists and ADA loses the $0.65 support, it could plummet to $0.51 or even $0.32—a 55% decline that would take it to levels not seen since December 2024.

Final Thoughts

Cardano’s current situation highlights growing bearish momentum but also hints at a possible consolidation phase. With whale activity steady and critical support levels being tested, ADA’s future movement depends on whether sellers maintain control or if a catalyst can spark a reversal. For now, both investors and analysts are watching closely to see how the market develops.