ADA dropped by 18% over the past week, raising questions about its future.
A significant reduction in whale addresses signals weakening market confidence.
Cardano [ADA] has faced a notable downturn, with its price dropping by 18% in the past week.
This decline comes hand in hand with a sharp reduction in whale activity, as the number of whale addresses plummeted to its lowest level since the 9th of January.
This combination of falling price and diminishing whale interest raises questions about the future trajectory of Cardano, especially as market sentiment and network dynamics shift.
Cardano hits pivotal level
At the time of writing, Cardano was down 50% from its December peak of $1.3, marking a multi-month downtrend channel (white). The current price action retested the channel’s range low, which also doubled as a bullish order block (likely support, cyan) at $0.69.
However, technical indicators show mixed signals. The daily RSI is below a neutral level, indicating muted demand. But the Chaikin Money Flow (CMF) flipped positive, suggesting improved inflows.
Simply put, ADA bulls could attempt to defend the range-low, if BTC recovers. On the contrary, a sustained sell-off could drag ADA to $0.56, the first cool-off zone after the post-US election upswing.
ADA’s speculative interest drops
ADA’s weak demand was also evident in the Futures market. The altcoin’s speculative interest dropped over 60% from $1.48B in January to $555M, at press time. This meant investors withdrew money from the derivatives market, a bearish signal.
From a liquidity perspective, there were four key pockets of liquidity (bright yellow) worth tracking. The levels were $0.78, $0.75, $0.7 and $0.62.
The $0.78 aligned with the channel’s mid-range level, while $0.62 coincided with the range lows. In case of a liquidity sweep, the altcoin could fluctuate between these key levels, especially if BTC fails to set a decisive direction.
