Key takeaways
- ADA remains under pressure after the 30% sell-off last week
- The currency could decline if the downward trend in the market continues.
Cardano (ADA) continues to struggle on Wednesday, trading near $0.1600 and extending losses after a sharp 30% drop last week.
The cryptocurrency remains under heavy selling pressure as investor confidence weakens and retail participation fades.
Despite the bearish backdrop, on-chain data suggests that selling activity from long-term holders may be approaching exhaustion, which could pave the way for a future recovery.
A rise in dormant supply signals capitulation among long-term bondholders
Recent on-chain data from Santiment shows a significant increase in idle ADA supplies returning to circulation during early June.
Numerous increases in dormant supply exceeded 20 billion ADA, culminating in a massive move of 40.6 billion ADA on June 9, the largest rise on record during the current sell-off.
This flurry of activity indicates that long-term holders who previously remained inactive have chosen to move or sell their holdings amid market weakness.
The increase also halted the growth in the average age of ADA wallets, confirming that dormant addresses are becoming active again.
While further selling from longer-term holders is still possible, such rallies are often viewed as capitulation events indicating exhaustion of selling pressure and frequently precede market bottoms.
Retail sentiment towards Cardano has deteriorated significantly following last week’s decline.
Derivatives data highlights a decline in speculative demand. according to Queen GlassOpen interest (OI) for Cardano futures fell to $348.55 million, the lowest level since November 2024. This extends a steady decline from the $585.35 million recorded on May 12.
A decline in interest typically indicates that traders are closing their leveraged positions and becoming more risk averse, reducing the likelihood of a strong recovery in the near term.
ADA Price Analysis: Can Cardano Stay Above $0.1500?
Cardano is trading just below $0.1600, maintaining a downward trajectory after hitting a short-term peak at $0.1745 on Monday.
Technical indicators continue to favor sellers. The Relative Strength Index (RSI) at 39 is approaching the oversold zone, indicating intense selling pressure.
The Moving Average Convergence Divergence (MACD) indicator remains below the zero line, confirming that bearish momentum is still prevailing.
While oversold conditions may lead to minor rallies from time to time, there is currently no strong evidence of a trend reversal.
If the rally resumes, ADA could surpass Monday’s high of $0.1745 before reaching the psychological level of $0.2000.
A return above the $0.2205-$0.2275 area will be needed to weaken the prevailing bearish outlook.
However, if the sell-off continues, ADA could fall below Saturday’s low at $0.1486, with the key long-term support target at $0.1000 as well.
A break below $0.1486 could expose ADA to a deeper decline towards the $0.1000 region.
