Cardano's native token ADA is facing significant selling pressure from large investors, with whales offloading approximately 190 million ADA (worth roughly $50 million) over the past week. This substantial sell-off has reduced whale holdings from 13.57 billion ADA to around 13.38 billion tokens, representing about 36.3% of the asset's circulating supply. The dumping occurred as ADA's price recently hit a five-year low, trading around $0.26 at the start of February.
Analyst Ali Martinez highlighted this whale activity, noting that such large sell-offs increase the supply of ADA on the open market. Combined with stagnant demand, this typically leads to price pullbacks. The Relative Strength Index (RSI) for ADA currently stands at around 74, indicating the asset is in overbought territory and potentially poised for a correction.
Despite the bearish technical indicators, some community members remain optimistic. X user Aman pointed out that ADA has reached a historical demand zone around $0.26, which has previously sparked major reversals. Another analyst, Mentor, noted that the last time ADA traded at current levels, it subsequently rallied to nearly $1.40 within a month, suggesting "history is going to repeat itself soon." Supporting this bullish perspective, ADA's exchange netflows have been predominantly negative in recent months, indicating investors are moving coins from centralized platforms to self-custody wallets, reducing immediate selling pressure.
Meanwhile, Cardano continues to advance its ecosystem with several significant developments. The network recently approved a major LayerZero integration, connecting Cardano to over 160 blockchains. Additionally, a new privacy-focused stablecoin called USDCx is scheduled to launch at the end of February, and Cardano's Midnight partner chain has confirmed a mainnet rollout before the end of March.
However, ADA's price action remains heavily correlated with Bitcoin's performance. If Bitcoin experiences another 30% decline from current levels—potentially dropping to the $47,000–$50,000 range—analysts predict ADA could face further downward pressure. Initial support levels for ADA are seen at $0.226, with the next major zone at $0.20. In a deeper market washout scenario, ADA could potentially slide toward the $0.15–$0.17 range before establishing a true bottom.
Regulatory uncertainty also persists, with Grayscale having filed for a spot ADA ETF, though approval remains uncertain. For a sustainable recovery, analysts suggest ADA needs to reclaim and hold above the $0.326 level, but until broader market sentiment improves and Bitcoin stabilizes, Cardano remains vulnerable to continued downside pressure despite its improving fundamentals.
