Cardano Whales Offloading ADA Tokens As Technical Outlook Worsens

Cardano (ADA) recently underwent a massive pump-and-dump, rising by over 100% in early March only to give most gains away to profit-takers. Since then, the cryptocurrency has consolidated sideways, signaling a growing bias conflict among traders about the next market bias.

However, from the standpoint of on-chain data and technical analysis, ADA is painting a bearish picture for the coming weeks.

ADA Bear Pennant Pattern Points to 35% Crash Next

Cardano has confirmed a bear pennant breakdown on the 4-hour chart, signaling a potential continuation of its downward trend. The price rejected resistance at $0.742, failing to reclaim its 50-period and 200-period EMAs, reinforcing bearish sentiment.

The bear pennant, a classic continuation pattern, formed after ADA’s sharp drop from $1.15 to $0.713. The consolidation that followed was a symmetrical triangle, but the pattern has now broken to the downside.

The breakdown has sent ADA to $0.714, and technical projections suggest a measured move toward $0.464 by April, aligning with the magnitude of the previous downtrend.

The RSI, at 44.06, remains bearish, suggesting further weakness, while declining momentum confirms the pattern’s validity.

On-Chain Data: Cardano Whales Are Selling ADA

On-chain data from Messari, which tracks the supply of ADA held in addresses with at least 1,000,000 ADA, supports the technical bearishness.

Note that:

• Between March 2 and March 9, whale-held supply dropped from 23.108 billion ADA to 23.106 billion ADA, marking a net outflow of approximately 2 million ADA in just one week.
• This decline suggests that large holders (whales) are offloading their positions, likely anticipating further price declines or reallocating capital elsewhere.

Historically, whale accumulation precedes rallies, while whale distribution often signals upcoming sell-offs. This trend could indicate further downside for ADA unless buying pressure returns.

Fundamental Weakness and Market Sentiment

Fundamentally, Cardano faces challenges that align with this bearish outlook. Despite its reputation for a research-driven approach and robust staking ecosystem, the network has struggled to maintain momentum in the broader crypto market.

• Decentralized Application (dApp) Activity: As of March 17, 2025, Cardano ranked outside the top 10 blockchains by total value locked (TVL), with approximately $360 million in its DeFi ecosystem. This is substantially lower than Ethereum’s $48.97 billion and Solana’s $7.06 billion TVL.

• Smart Contract Growth: Despite the 2021 Alonzo hard fork introducing smart contract functionality, Cardano’s transaction volume has lagged behind expectations, with daily transactions averaging 66,000 in early March, compared to Ethereum’s 1.1 million.

Broader macroeconomic factors have also weighed on sentiment. The Federal Reserve’s pause on rate cuts and a risk-off environment led by the ongoing “trade war” have disproportionately affected altcoins, making it harder for ADA to attract fresh capital.