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Bearish signal for ADA as Cardano whale activity lulls

Bearish signal for ADA as Cardano whale activity lulls

Cardano (ADA) now faces significant bearish signals with a whale and DeFi activity drop, while testing price support. Investors see a neutral-to-bearish outlook in ADA’s short-term price forecast, bringing uncertainty for the week.

Among some relevant indicators, the ecosystem expert, Ali Martinez, pointed out that Cardano is experiencing a “lull in whale activity.”

The well-known on-chain analyst and ADA trader believes this signals further consolidation or lower prices for Cardano’s native token. Martinez posted his insight on X (formerly Twitter) on April 5.

In particular, the trader used the daily Whale Transaction Count indicator, filtered for amounts above $1 million in ADA. Notably, this transaction count has dropped to 202 per day, below February results when prices were lower than currently.

Cardano whale activity. Source: @ali_charts 

Cardano (ADA) bearish price analysis

From a technical perspective, ADA is currently consolidating at an important price support at around $0.58 per token. Historically, this level showed resilience and acted as a key zone for both price recovery and trend shifts.

Therefore, holding this current level in Martinez’s first projection of price consolidation could further ignite a surge for Cardano’s native token.

ADA/USD daily price chart. Source: TradingView

On the other hand, facing an impending drop could fuel a downtrend continuation toward the $0.45 mark. ADA’s daily Relative Strength Index (RSI) also hints at a bearish momentum and lack of strength to recover.

Moreover, the total value locked (TVL) in its ecosystem has suffered a major hit, down over 22% in the last 30 days to $378.24 million. With these losses, Cardano has dropped to the 17th position by TVL, according to the DefiLlama index.

Cardano TVL rank. Source: DefiLlama

This is yet another bearish signal considering Cardano’s total value locked weighted by its market capitalization. On that note, ADA’s $20.81 billion market cap is 55 times higher than its ecosystem TVL. Thus, suggesting an overbought DeFi and Web3 asset in comparison to competing ecosystems and tokens.

Overall, investors should closely watch these and other indicators that potentially signal a bearish momentum for ADA. Besides the lowering whale activity, Cardano’s DeFi ecosystem and tokens saw a massive capital outflow, while ADA struggles to keep its historical price support.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

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