ADA’s Recent Decline: 18% Drop in a Week

ADA has faced a notable downturn, with its price dropping by 18% in the past week. This decline coincides with a sharp reduction in whale activity, as the number of whale addresses has plummeted to its lowest level since January 9.

Market Weakness and Security Concerns

ADA’s decline extends a downtrend that has persisted since early February. A lack of strong support is evident on the daily chart, with lower highs and lower lows reinforcing bearish sentiment. The RSI is at 36.37, indicating weakened buying pressure but leaving room for a potential short-term bounce. The OBV continues to decline, reflecting sustained sell pressure.

ADA briefly dipped below $0.65 before recovering slightly, indicative of some defensive buying. However, without stronger demand, any rebound may be short-lived. Additionally, external factors, such as a $1.5 billion hack at Bybit in February 2025, have affected investor confidence and triggered broader market sell-offs.

On the regulatory front, the SEC’s acknowledgment of a Cardano ETF proposal has introduced uncertainty. While approval could drive long-term institutional adoption, it may also fuel short-term volatility.

Declining Whale Addresses

According to Santiment data, the number of whale addresses holding between 1 million and 10 million ADA has dropped to 2,454, the lowest since January 9. Large holders may be reducing their positions or hesitating to accumulate, signaling weakening confidence in ADA’s near-term prospects. Whale activity, a critical indicator of market sentiment, influences price stability. Their decreasing presence could lead to increased volatility and further downside pressure.

If whales continue to retreat, ADA may struggle to establish robust support levels, reinforcing the bearish trend. Conversely, a resurgence in whale accumulation could indicate renewed confidence and a potential shift in momentum.

A Shift in Market Dynamics?

If the decline in whale addresses marks the beginning of a broader trend, it could have significant long-term implications for Cardano. Reduced whale participation may lower liquidity, increasing vulnerability to sharp price swings. Sustained selling pressure from large holders could deter institutional interest, limiting ADA’s upside potential. However, if smaller investors step in to fill the gap, ADA’s market structure could shift toward a more decentralized distribution. The coming weeks will be crucial in determining whether this decline is a temporary retreat or a deeper change in ADA’s investor landscape.