Cardano Flashes Red for Further Drop as Whales Go Quiet, Only Retail Investors Were Fooled

▲ Cardano (ADA), Cryptocurrency Whale/AI-Generated Image

Warning signals are flashing that Cardano (ADA) could plunge further to the $0.23 level as massive sell-offs by whale investors coincide with a breakdown in technical indicators.

According to crypto media outlet BeInCrypto on February 23 (local time), Cardano recently lost a key support level and has continued its downward trend, entering a precarious phase. Notably, a major whale group holding between 100 million and 1 billion ADA began offloading their holdings even before the sharp price drop, sending shockwaves through the market. This group held 2.54 billion ADA on February 19 but reduced their holdings to 2.42 billion ADA by February 23. In just four days, they sold approximately 120 million ADA, worth around $30 million.

In contrast to the whale exodus, retail investors have engaged in aggressive dip-buying, further increasing market uncertainty. Exchange flow data shows net outflows surging 640% in just two days, from $344,450 on February 21 to $2.55 million on February 23. While retail investors are absorbing the supply released by whales in anticipation of a rebound, the fact that major market movers have not resumed buying is seen as a strong signal of further downside risk.

Technical indicators paint an even bleaker outlook. An 8-hour chart shows a completed head-and-shoulders reversal pattern, and the key support level at $0.266 has been broken. If Cardano, currently trading around $0.265, fails to defend the next support at $0.259, the price could plunge vertically to $0.233. This would mark an additional decline of roughly 12% from current levels.

On-chain profitability metrics suggest the bottom has not yet been reached. The proportion of the total supply in profit fell to 6.06% on February 12 before recovering to around 8.45%, but historically, deeper capitulation has been required to form a true market bottom. The smart money indicator is also diverging from price action, signaling continued weakness, suggesting that retail buying alone may be insufficient to reverse the trend.

For Cardano to lay the groundwork for a rebound, it must reclaim at least $0.276, and a full trend reversal would require stabilization above $0.293. However, with whales remaining on the sidelines and profitability indicators still in a middling range, the market appears unlikely to avoid further price corrections. Analysts warn that indiscriminate dip-buying by retail investors could instead act as a catalyst for a deeper downturn.

*Disclaimer: This article is for informational purposes only and the publisher is not responsible for any investment losses incurred based on this content. The information provided should not be construed as financial advice.*