Cardano Whales Dump Holdings, Driving ADA Price Down

Cardano’s price has taken a hit over the past week, dropping nearly 10%. While the broader cryptocurrency market has also been experiencing a downturn, ADA’s price fall can largely be attributed to a significant decline in whale activity. 

With mounting selling pressure, the coin is on track to reach a 30-day low. This analysis details why.

Cardano Whales Reduce Buying Activity

According to IntoTheBlock, Cardano’s large holders’ netflow has plummeted 90% over the past seven days. Large holders are whale addresses that hold more than 0.1% of an asset’s circulating supply.

Large holders’ netflow measures the balance between coins moving into and out of whale wallets, indicating their buying or selling activity. When this metric falls, it indicates that whales are selling large portions of their assets, leading to increased supply and potential downward pressure on price. 

This decline in whale netflow can signal weakening confidence for ADA retail traders, prompting them to also sell their coins in anticipation of further losses or hesitate to buy amid uncertainty. This can accelerate ADA’s price decline, especially if profit-taking sentiment spreads across the market.

Notably, this profit-taking sentiment is not restricted to just ADA whales. On-chain readings from the coin’s Network Realized Profit/Loss (NPL) confirm the market-wide surge in selloffs.

According to Santiment, after a few days of returning negative values, ADA’s NPL has posted a positive value on Wednesday, indicating that its holders are selling at a profit. 

A coin’s NPL measures the difference between the price at which the asset was last moved or sold and the current market price. It tells us how much profit or loss is “realized” by its holders.

When an asset’s NPL is positive, more investors are selling at a gain than at a loss.  This selling activity can lead to increased supply in the market, which may cause the asset’s price to fall if demand does not match the sell-off.

ADA Price Prediction: Could the Altcoin Hit a 30-Day Low?

ADA’s dropping Relative Strength Index (RSI) on the daily chart confirms the spike in selling activity. At press time, this stands below the 50-center line at 45.49.

The momentum indicator measures an asset’s oversold and overbought market conditions. It ranges between 0 and 100, with values above 70 indicating that the asset is overbought and may witness a correction. Conversely, values below 30 indicate that it is oversold and due for a rebound.

At 45.49 and in a downtrend, ADA’s RSI suggests that selling pressure is increasing, but the coin is not yet in oversold territory, leaving room for further declines.

If this price drop persists, ADA could plummet to a 30-day low of $0.82. On the other hand, a shift in market trends toward coin accumulation will invalidate this bearish projection. In that scenario, the altcoin’s price could climb back above $1.