- A symmetrical triangle pattern drives a long-term sideways trend in Cardano price.
- On-chain data shows that a crypto whale sold over 100 million ADA coins in the last 72 hours, accelerating the price correction.
- The open interest tied to Cardano futures saw a 56% drop in the last three weeks, registering weak participation from market speculators.
ADA, the native cryptocurrency of the Cardano ecosystem, fell 0.9% during Wednesday’s market hours to trade at $0.64. This downtick followed the broader crypto market pullback, despite investors’ optimism surrounding the Fed rate cuts. That said, the Cardano price faces additional selling from large ADA holders, also known as whales, signaling a risk for a prolonged correction in the near term.
ADA Struggles for Support as Whales Sell and Futures Market Shrinks
In the last three days, the Cardano price has plunged from $0.693 to $0.637, registering an 8.37% loss. Such a bearish reversal, despite a recent sell-off in price during the historic crypto deleveraging on Oct. 10, indicates intact overhead supply.
The falling ADA price gained additional momentum amid renewed selling pressure from crypto whales. In a recent tweet, market analyst Ali Martinez highlighted that over 100 million ADA coins were sold by large investors in the last 72 hours. Whale sell-offs typically drain liquidity from buy-side demand, leading to sharper price declines as retail investors follow suit or panic-sell.
Additionally, such behavior often precedes a broader sentiment shift, suggesting that institutional and high-net-worth participants may be reallocating capital.
In addition, the open interest tied to Cardano futures has plunged from $1.7 to $702.92 million in the last three weeks, registering a loss of 56%. This sharp decline in open interest suggests massive unwinding of leveraged positions as traders exit the market because of the recent sell-off and loss of confidence. Such a contraction is often indicative of reduced liquidity and a decline in market participation, which further intensifies bearish sentiment.
For ADA to experience a resurgence in price recovery, there should be a surge in open interest along with rising trading volumes—a signal that new capital and trader engagement are setting in and could provide upside support for the derivatives market.
Cardano Price Poised For Major Support Test
Earlier today, the Cardano price plunged to a low of $0.625 as it continues its prevailing correction momentum in the trend. However, during Wednesday’s U.S. market hours, the crypto market witnessed a bullish turnaround as the U.S. Federal Reserve cut interest rates by 25 basis points, the second time this year, to bolster the job market.
If the macroeconomic factor struggles to drive a generic bullish momentum in ADA price, the intact overhead supply could push the altcoin for another breakdown.
A potential bearish crossover between the trend-defining 100- and 200-day exponential moving averages accentuates the bearish sentiment in the market for continued correction. In addition, the sharp decline in the 20- and 50-day EMA slope acts as dynamic resistance against buyers during a relief rally.
With sustained selling, the Cardano price could plunge another 20% before hitting the bottom support of the symmetrical triangle pattern at $0.51. Since November 2024, the coin price has been resonating within the two converging trendlines of this pattern, which act as dynamic support and resistance.
The recent history of the pattern shows that a retest of the lower trendline has often encouraged buyers to drive a recovery extending above 70%. Thus, the bottom trendline stands as a key pivot level for ADA to bolster its next major move.
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