Cardano faces a 31% risk of decline as whales sell off

Cardano (ADA) is going through a challenging period as prices continue to plummet with no significant signs of recovery. The decline in investor confidence, along with selling pressure from whales, has caused ADA’s price to remain stagnant for an extended period. Currently, the big question is: Will ADA continue to drop another 31%?

Charles Hoskinson Supports the GENIUS Act

Recently, Charles Hoskinson—founder of Cardano—publicly expressed support for the GENIUS Act and agreed with former President Donald Trump’s statements that banks are trying to block this legislation. Hoskinson believes that positive changes from the bill could provide the necessary momentum to revive ADA.

“I agree with the President. Banks have amended the bill 137 times. They need to stop interfering and should not try to stifle this industry.”

However, despite Hoskinson’s support, market sentiment remains quite bleak. Major investors, often called “whales,” are leading a wave of sell-offs. Over the past week, approximately 210 million ADA, with an estimated total value of over $56.7 million, has been sold. The continuous withdrawal of funds by whales adds to the downward pressure, making ADA’s recovery prospects more uncertain.

Cardano Whales | Source: Santiment Widespread pessimism among the investor community, especially among large investors, is a major obstacle to ADA’s recovery efforts. While Hoskinson’s efforts are commendable, ADA’s value still faces heavy pressure, and investor confidence continues to decline.

Short-term Holders Dominate

Additionally, macroeconomic factors are not favoring Cardano. The MVRV Long/Short Spread—measuring profit levels between long-term holders (LTHs) and short-term holders (STHs)—is currently deep in negative territory. This indicates that short-term holders are in profit, while long-term holders are suffering significant losses.

The lack of a strong recovery rally, combined with low buying interest, has allowed short-term investors to dominate the market. These investors tend to sell off quickly once they realize small profits, further increasing selling pressure on ADA.

Cardano Long/Short MVRV Spread | Source: Santiment Selling pressure from short-term investors is intensifying, leading to high volatility in ADA’s price. With long-term investors showing little buying activity, the short-term outlook for Cardano’s price recovery remains uncertain.

ADA Price Forecast: Risk of Deep Decline

Currently, Cardano’s price hovers around $0.27, slightly below the key resistance level of $0.28. On the technical chart, ADA has formed a “bearish flag” pattern, indicating a potential further decline of 31.75% to the support level of $0.17. If it cannot break above the current resistance and continues to fall, ADA could face serious losses.

Negative market sentiment, combined with current price action, suggests that breaking below the $0.25 support could trigger a deeper decline. If ADA loses the $0.22 support, the “bearish flag” pattern will be confirmed, pushing the price down to $0.19 and possibly to the support level of $0.17.

Cardano Price Analysis | Source: TradingView However, if Cardano receives strong community support or macroeconomic conditions improve, ADA still has a chance to rebound from the $0.25 support level and reach $0.31. Breaking above $0.31 would invalidate the bearish thesis and open up prospects for recovery and growth in the future.

Conclusion

Cardano faces many significant challenges, from declining investor confidence to selling pressure from whales and short-term traders. With the current situation, ADA needs a strong external catalyst or positive shifts in market sentiment to reverse its downward trend. All eyes are now on the $0.25 support level, which will determine ADA’s next move.