Cardano (ADA) price is down 15% in seven days to trade at $0.233 at the time of writing. The drop coincides with intense selling by large addresses, falling network activity, and a bearish sentiment from futures traders.
Whales Dump Cardano as Network Activity Weakens
Analyst Ali Martinez on X notes that large holders have sold more than 110 million ADA within five days since October 8.
This selling behaviour coincides with a decline in Cardano’s network activity despite the recent network update to bring tokenization to Cardano.
The number of daily active addresses on Cardano has also dropped from 27,248 to 15,977, representing a 41.36% decline. This drop suggests that there is reduced activity around Cardano even as whales continue to sell.
However, data from DeFiLlama shows a slight increase in Cardano’s DeFi Total Value Locked (TVL) from 257.43 million ADA on October 6 to 279.88 million at the time of writing. This shows that the TVL has increased by 22.45 million within one week.
ADA’s Futures Market Shows Bearish Positioning
Data from CoinGlass shows that short sellers are dominating long buyers in the Cardano futures market. Per the data, Cardano’s 24-hour long volumes reached $342 million at the time of writing, with this being lower than the $383 million in short selling volumes.
Cardano’s long/short reading has also dropped to 0.86. This reading has remained below 1 since October 5 due to an increase in short accounts betting against ADA value.
Source: CoinGlassThis level of short interest suggests that most futures traders support a bearish long-term Cardano price forecast.
However, increased short positioning could also trigger a short-selling event if a sudden surge in Cardano price forces short sellers to close their positions.
Cardano Price Breaks Crucial 200D EMA Support
The one-day chart for Cardano shows that the price has dropped below support at the 200-day EMA. Cardano closed below this EMA yesterday, and it is now testing it as resistance. If it breaks, the price may resume an uptrend towards $0.27.
Cardano also remains within a massive ascending channel on the one-day chart, suggesting that the uptrend that started in late June remains in play. Cardano will invalidate this pattern if the price moves below the channel’s lower trendline.
Source: TradingViewHowever, the price has dropped below the midline of the channel. The AO bars also suggest that bullish momentum is becoming weak. A drop below the support at $0.23 could trigger another drop to the psychological support at $0.20.
