Cardano Price Forecast: ADA correction deepens as whales sell

• After a decline of nearly 6% the previous day, Cardano edges above $0.2100 on Friday.
• A substantial reduction in whales’ ADA holdings is adding to selling pressure, according to on-chain data.
• An 11% fall in ADA Open Interest over 24 hours, alongside a negative funding rate and increased long liquidations, points to sellers retaining control.

Following a roughly 6% fall the previous day, Cardano (ADA) recovers nearly 2% on Friday. That earlier retreat coincides with a preference for selling among large-wallet investors, commonly known as whales, and in Cardano derivatives markets. Continued downward momentum leaves ADA’s technical outlook bearish.

Whales Reduce Their ADA Holdings

Reduced appetite for ADA among whales is adding to near-term selling pressure. According to Santiment, investors with 10 million to 100 million ADA tokens hold 37.93% of the circulating supply on Friday, compared with 38.27% on 10 October. 

By comparison, investors holding more than 100 million ADA tokens control a smaller proportion of circulating supply. Their share stands at 16.04% on Friday, having risen from 15.92% over the same period. Meanwhile, the proportion of ADA supply in profit has fallen from 30.78% to 17.8%, suggesting a sudden bout of profit-taking. 

Overall, whale activity points to a preference for selling that could hamper subsequent recovery attempts.

Cardano Futures Show a Growing Bias Towards Selling

Retail traders are also becoming less bullish on Cardano. With the spot price falling, CoinGlass reports that ADA futures Open Interest (OI) has dropped 11% in the past 24 hours to $464.36 million, reflecting a reduction in the value of active positions. A simultaneous fall in OI and the spot price typically points to the unwinding of long positions and lower leverage. Of the $1.60 million in total liquidations over that period, long positions accounted for $1.56 million, further highlighting the strength of selling pressure. 

Meanwhile, a move in the funding rate to -0.0064% has taken it into negative territory, signalling traders’ willingness to pay a premium to take short positions.

Technical outlook: Cardano faces pressure towards $0.20 support

At $0.2159 at the time of writing on Friday, Cardano remains under downward pressure beneath its key moving averages and former rising support line. Overhead resistance from the 50-day Exponential Moving Average (EMA) at $0.2274 and the broken rising trendline around $0.2282 limits the near-term outlook, reinforcing the bearish tone. Further up, the 200-day EMA at $0.2322 presents a structural barrier.

Momentum remains weak, with the Relative Strength Index (RSI) at 41. The Moving Average Convergence Divergence (MACD) is also falling into negative territory, suggesting sellers continue to hold the advantage.

With the easier path still pointing lower, immediate support lies at the $0.2000 round number. Below that, the 30 August low establishes a horizontal support level at $0.1894.

Any advance would first encounter the 50-day EMA near $0.2274, closely followed by the reclaimed trendline at $0.2282. Together, these form a narrow supply zone that buyers must clear to reduce immediate downside risk. Beyond that lies a more substantial obstacle at the 200-day EMA around $0.2322. A sustained daily close above this level would begin to weaken the prevailing bearish bias and create scope for a broader recovery.

(The technical analysis of this story was written with the help of an AI tool. Know more.)