The Cardano price rebounded to $0.2176 on Friday, recovering from a sharp 6% sell-off the previous day. Mid-tier whales, holding between 10 million and 100 million $ADA tokens, reduced their supply dominance slightly, reinforcing bearish sentiment in the market. Meanwhile, the open interest tied to $ADA’s futures contracts shrank by 30% over three weeks, signaling a lack of conviction among derivative traders.
Cardano’s native cryptocurrency, $ADA, saw a 2% uptick during Friday’s Asian market hours, following a 6% decline the day before. The sell-off aligns with broader market pullbacks, but Cardano faced additional pressure from large-wallet investors trimming their holdings and retail buyers showing little interest. Technical indicators suggest the risk of a prolonged price correction.
On-chain metrics highlight a bearish shift, with mid-tier whales reducing their dominance from 38.27% to 37.93% and larger addresses slightly increasing their share. Profit margins also fell sharply, with the proportion of the circulating $ADA supply in profit dropping from 30.78% to 17.8%, indicating significant profit-taking. These metrics suggest a sell imbalance among leading investors, potentially restricting recovery efforts.
Cardano’s price has faced intense downward pressure over the past three weeks, plunging 20% from a local high of $0.2704 to $0.2164, reducing its market capitalization to $7.95 billion. The aggressive price reversal led to long liquidations worth nearly $1.8 million in $ADA perpetual contracts. The open interest collapsed from $658 million to $459.5 million, reflecting a mass exodus of capital and declining market participation.
The negative funding rate of -0.0095% indicates that short traders are paying long traders to maintain bearish positions, highlighting prevailing bearish sentiment. The Cardano price also broke below a multi-month recovery channel, signaling a change in market momentum. If the price continues to hold below $0.22 resistance, sellers could drag the asset to the next significant support near $0.19.