Cardano’s 18% slump and falling whale activity raises concerns – What next?

• ADA dropped by 18% over the past week, raising questions about its future.
• A significant reduction in whale addresses signals weakening market confidence.

Cardano [ADA] has faced a notable downturn, with its price dropping by 18% in the past week.

This decline comes hand in hand with a sharp reduction in whale activity, as the number of whale addresses plummeted to its lowest level since the 9th of January.

This combination of falling price and diminishing whale interest raises questions about the future trajectory of Cardano, especially as market sentiment and network dynamics shift.

Could this be a temporary setback, or is it an early warning sign of deeper challenges for ADA?

ADA’s dips: Market weakness and security concerns

ADA has suffered an 18% decline in the past week, extending a downtrend that has persisted since early February.

The daily chart highlighted a lack of strong support, with lower highs and lower lows reinforcing bearish sentiment.

The RSI sat at 36.37, teetering just above the oversold zone — weakened buying pressure but leaving room for a potential short-term bounce.

However, the OBV continued to decline, reflecting sustained sell pressure and weak accumulation.

ADA briefly dipped below $0.65 before recovering slightly, indicating some defensive buying, but without stronger demand, any rebound may be short-lived.

Beyond technical weakness, external factors have exacerbated ADA’s decline.

A $1.5 billion hack at Bybit in February 2025 rattled investor confidence, triggering broader market sell-offs that may have intensified ADA’s losses.

Meanwhile, a sharp drop in whale activity has added to market instability, as large holders play a crucial role in price movements.

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

Declining whale addresses: A sign of weakening confidence?

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 the 9th of January.

Large holders are either reducing their positions or hesitating to accumulate, signaling weakening confidence in ADA’s near-term prospects.

Whale activity is a critical indicator of market sentiment, as these large entities often drive liquidity and influence price stability.

Their decreasing presence could exacerbate volatility and makes ADA more susceptible to further downside pressure.

If whales continue to retreat, ADA may struggle to establish strong support levels, reinforcing the current bearish trend.

However, 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 lead to lower liquidity, making the asset more vulnerable to sharp price swings.

Additionally, 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 is a temporary retreat or a deeper change in ADA’s investor landscape.