Cardano Shows Technical Weakness as On-Chain Metrics Signal Growing Distribution Phase

• Large Cardano holder netflow drops 142% in seven days
• Holder count decreases from 4.47M to 4.40M
• Price falls below key EMAs, threatening $1.05 support

Cardano’s recent price action presents a concerning picture as the cryptocurrency struggles to maintain stability around the psychologically important $1 level.

The convergence of multiple technical and on-chain indicators suggests mounting pressure that could lead to further price deterioration.

Understanding the Cardano Holder Dynamic

The large holders’ netflow metric provides crucial insight into the behavior of significant market participants who control between 0.1% and 1% of the circulating supply.

The dramatic 142% decline in this metric over the past week indicates a substantial shift from accumulation to distribution among these influential holders. This behavior pattern typically precedes periods of price weakness, as larger holders often position themselves ahead of market movements.

Adding to the concerning signals, Cardano’s holder count has experienced a notable decline from 4.47 million to 4.40 million since November. This reduction in market participants suggests that profit-taking from the recent rally has begun to outweigh new investor interest.

The timing of this decrease is particularly significant as it coincides with the period of price appreciation, indicating that longer-term holders may be using strength to reduce positions.

The four-hour chart reveals critical technical damage as price action has fallen below both the 20 and 50 Exponential Moving Averages. These moving averages often provide dynamic support during uptrends, and their breach typically signals a shift in market structure.

The position below these indicators suggests that shorter-term momentum has turned negative, increasing the likelihood of a test of deeper support levels.

With multiple indicators suggesting growing weakness, the $1.05 ADA support level becomes crucial for maintaining market structure. A breach below this level could accelerate selling pressure toward $0.95.

However, traders should remain mindful that a push back above the EMAs could invalidate this bearish scenario and potentially drive prices toward $1.19. The interaction between these technical levels and ongoing distribution patterns will likely determine Cardano’s next significant move.