Cardano (ADA) has faced a significant decline, dropping by 34% over the last 30 days and more than 15% in the past week. The cryptocurrency is currently trading below the $1 mark, reflecting a strong bearish sentiment. With its market cap now at $22 billion, the downward trend in ADA is continuing to attract attention from investors and analysts alike.

Technical Indicators Show Intense Selling Pressure

Cardano’s technical indicators are suggesting a persistent downtrend. One of the most notable signals is the rising ADX (Average Directional Index), which currently stands at 46.8. This metric, which measures the strength of a trend, has increased sharply from 10.3 just a week ago on February 23. An ADX above 40 indicates a very strong trend, confirming that the current bearish momentum is gaining strength.

With the ADX at such elevated levels, the trend’s strength points to intensifying selling pressure, suggesting that the downtrend could continue unless a significant increase in buying activity occurs. The strong ADX reading reduces the likelihood of a quick reversal, reinforcing the view that ADA may face more downward movement in the near future.

Decrease in Whale Activity Adds to the Bearish Sentiment

The number of Cardano whales—addresses holding between 1 million and 10 million ADA—has significantly decreased in the past week. From 2,477 on February 21, the number has dropped to 2,454 as of now, marking the lowest level since early January. Whale activity is often a key indicator of market sentiment because large holders can greatly influence the price movement.

The sharp decline in the number of these large holders signals that major investors may be reducing their positions or distributing their holdings. This action is typically associated with bearish sentiment, as it indicates weakened confidence among these significant investors. Furthermore, a decrease in whale activity can increase market supply, which in turn could place additional pressure on the price of ADA.

Potential Support Levels and Price Forecast

Cardano’s current price setup, particularly the position of its Exponential Moving Average (EMA) lines, suggests ongoing bearish momentum. The short-term EMA lines are positioned below the long-term EMA lines, which typically indicates a continuation of the downtrend. Given this technical structure, ADA could test the key support level at $0.50 if the selling pressure persists.

If the price fails to hold above $0.50, ADA could face a more substantial decline toward the $0.32 level, marking its lowest point since early November 2024. This scenario would signal a deeper bear market and further downside potential for Cardano.

However, if the $0.50 support level holds, there is a possibility that ADA could reverse its trend. In this bullish case, the price could rally toward the next resistance level at $0.65. If that level is surpassed, Cardano might continue its upward movement toward $0.83 and even $0.90, potentially paving the way for a rise above the $1 mark, which it has not seen since late January.

Conclusion

Cardano (ADA) has been struggling to maintain its value amidst a strong downtrend, with both technical indicators and whale activity suggesting ongoing bearish momentum. If the selling pressure continues and key support levels fail, ADA could see further declines. However, if support levels hold and buying interest picks up, the cryptocurrency could potentially reverse its trend and attempt a rally. Investors will need to closely monitor the market’s response to these critical levels in the coming weeks.