Cardano’s price has been swept up in the broader market sell-off, falling 7.6% in the last 24 hours and erasing a significant portion of its recent gains. Despite the downturn, the token, ADA, remains up 28.6% over the past month, leaving traders weighing conflicting market signals.
Beneath the surface, a complex dynamic is unfolding. On-chain data reveals that Cardano’s largest investors, or “super whales,” are reducing their positions, while retail holders continue to accumulate the token. Simultaneously, short sellers are increasing their bearish bets in the derivatives market, creating a three-way tug-of-war for control of ADA’s price direction.
Evidence of the bearish sentiment among major players comes from wallets holding one billion ADA or more, which have decreased their collective stake from 5.43% to 5.02% since late June. This selling pressure coincides with a decline in network activity. The number of active addresses on the Cardano blockchain has dropped by over 40% from its July 18 peak of 42,000, a downturn that preceded the token’s price fall from its local top of $0.92.
In contrast to the whales, retail traders appear to remain bullish. For months, net flows from cryptocurrency exchanges have been negative, indicating that more ADA is being withdrawn to private wallets than deposited for sale—a classic sign of accumulation.
However, derivatives traders are aligning with the whales. A 30-day liquidation map shows $141.7 million in short positions betting on a price decline, compared to just $74 million in long positions. This build-up of shorts could either intensify downward pressure if whale selling persists or set the stage for a short squeeze if bullish retail sentiment prevails.
Currently, ADA is trading near critical support levels at $0.71 and $0.68. A break below this zone could see the price drop toward $0.62, which would trigger the liquidation of remaining long positions and validate the bearish outlook. Conversely, if bulls can reclaim the $0.73 and $0.78 resistance levels, momentum could shift. Such a move would likely trigger a wave of short liquidations, pushing the price toward the next targets at $0.84 and $0.93.
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