Cardano (ADA) has recently seen a significant surge in whale activity, with over 130 million ADA purchased in the last 72 hours. Despite this massive buying spree, the price of ADA continues to struggle, currently trading at $0.5912, reflecting an 11.65% decline in the past 24 hours. While the whale activity signals renewed interest in the cryptocurrency, several factors suggest that short-term price recovery remains unlikely.

Whale Activity and Market Conditions

Whale purchases can often be seen as a sign of confidence in a cryptocurrency, and the 130 million ADA purchased by large investors over the past three days could indicate renewed optimism for Cardano. However, this surge in whale buying alone does not guarantee an immediate price rally. The overall market conditions for Cardano remain bearish, with various indicators pointing to continued downward pressure on its price.

Cardano’s price action has been bearish for several weeks. It recently broke through key support levels and has been consolidating within a symmetrical triangle pattern. This pattern typically signals that volatility is on the horizon, though it remains uncertain whether this will lead to a price increase or further declines.

Key Support and Resistance Levels

At the time of writing, ADA is trading just above the $0.5928 support level. If this support fails to hold, Cardano could see further declines, potentially reaching $0.5793. On the upside, resistance is observed at $0.6793, with a stronger resistance level at $0.9907. For Cardano to break free from its bearish trend, the price must maintain support at these key levels and overcome the resistance points. However, with the current market conditions, a rally seems uncertain.

Declining Active Addresses

One of the most concerning indicators for Cardano is the sharp decline in its daily active addresses. Currently, there are only 24,407 active addresses, a significant drop from the higher levels seen in late 2024. This decrease suggests that retail interest in Cardano is waning. While whales are purchasing large quantities of ADA, the lack of retail participation could limit the upward price momentum in the short term. Without increased involvement from smaller investors, Cardano may struggle to achieve a strong recovery.

Negative MVRV Ratio: Bearish Sentiment Prevails

The MVRV (Market Value to Realized Value) ratio for Cardano has dropped to -6.05%, which indicates that ADA is currently undervalued relative to its historical price. This negative MVRV signals that many investors who purchased ADA at higher price levels are now holding their positions at a loss. This situation often leads to fewer buyers entering the market, further suppressing price movement and maintaining bearish sentiment.

The negative MVRV ratio also suggests that there is a lack of optimism in the market, with investors hesitant to take risks in purchasing ADA at these price levels.

Liquidation Pressure: A Potential Downward Cascade

Adding to the bearish outlook is the increasing liquidation pressure on ADA. The liquidation heatmap reveals that many leveraged positions are concentrated below the $0.60 level, meaning that if Cardano’s price continues to decline, forced liquidations could occur. This would likely trigger a cascade of additional sell-offs, exacerbating the downward pressure on the price.

Will Whale Activity Trigger a Price Rally?

Despite the substantial whale activity, Cardano faces significant hurdles in achieving a price recovery. The decline in daily active addresses, negative MVRV ratio, and growing liquidation risks all point to a bearish market phase for ADA. These factors suggest that while the surge in whale buying is notable, it may not be enough to reverse the current market trend in the short term.

In conclusion, unless there is a substantial shift in market sentiment or a surge in retail participation, ADA is unlikely to experience a strong rally in the near future. The cryptocurrency will need to overcome the current bearish pressure and attract broader market interest to trigger a meaningful price recovery.