Major holders of ADA have been offloading positions amid a contraction in Cardano’s decentralized finance (DeFi) activity, signaling a deteriorating on-chain narrative even as price holds near key technical levels.
Key Takeaways:
- Large wallet addresses have collectively shed hundreds of millions of ADA, marking a retreat by whales from the Cardano ecosystem.
- Cardano’s DeFi total value locked (TVL) has seen a substantive drop (≈ 20 %), weakening its competitive standing among Layer-1 chains.
- The price of ADA remains under pressure, trading in a tight band, with short-term resistance and support levels becoming increasingly critical.
On-chain data shows that major ADA holders have reduced their exposure to Cardano in recent weeks. Reports suggest over 350 million ADA tokens were sold or transferred out of large wallets over the past week, signaling a growing lack of conviction among institutional and long-term investors.
The move coincides with a sharp contraction in Cardano’s DeFi ecosystem, where total value locked (TVL) has fallen nearly 17% to around $283 million, according to DefiLlama’s real-time market data. This decline highlights Cardano’s ongoing struggle to compete with faster-growing Layer-1 networks like Solana and Avalanche, both of which continue to attract developers and capital inflows.
Cardano’s DeFi TVL dipped around $282.46M, a 2.35% drop in the day and 17% drop over the past week. Source: DefiLlama
Market analysts note that previous instances of heavy whale selling preceded periods of stagnant or declining ADA prices, suggesting current on-chain dynamics could foreshadow further weakness.
ADA Struggles to Hold Support Levels
As of this writing 8:55AM UTC, Cardano (ADA) is trading at approximately $0.669, dropping 5.4% over the past 24 hours, according to TradingView. The token peaked intraday highs near $0.707 and lows around $0.6621, as per CoinGecko.
From a technical standpoint, the 14-day RSI reads around 50, placing ADA in neutral territory. The token continues to trade below its 100-day and 200-day moving averages, both of which have acted as persistent resistance in recent sessions. Analysts describe market momentum as “directionless,” noting that volatility remains low compared to early-October trading ranges.
Analysts Warn of Liquidity Risks if Whales Stay Out
Whale capital plays a crucial role in maintaining liquidity across Cardano’s crypto markets. With large holders scaling back, order book depth on major crypto exchanges may thin out, heightening the risk of sharp price swings during broader market moves.
The shrinking DeFi footprint compounds the issue. Fewer active smart contracts and declining user deposits reduce network activity, making it harder for the ecosystem to attract new liquidity providers or investors seeking yield opportunities.
Still, some smaller projects, such as Mutuum Finance (MUTM), have reportedly seen renewed attention from early-stage investors who view current conditions as an entry opportunity. However, these isolated signs of interest have yet to offset the broader capital flight from the Cardano ecosystem.
Outlook: Consolidation Likely Unless Catalysts Emerge
Cardano navigates a challenging path ahead especially its currently high chances of remaining in a consolidation phase, unless whale accumulation resumes as well as its DeFi engagement stabilization. With its neutral RSI, TVL lowering at the time of writing, and no major catalysts present, Cardano will stay in its muted short-term volatility, but more on bearish momentum.
Key factors investors are watching closely are: on-chain accumulation patterns, and TVL reversals that may trigger a renewed strength and more chances of pullbacks. Also, if any major network upgrades or broader crypto market sentiment improves, it can can provide enough momentum to lift ADA out of its current price action.
Summary
Cardano whales have reduced exposure while DeFi TVL declines toward ~$283M, pointing to cooling momentum. With ADA under key moving averages and sentiment neutral, risks include thin liquidity if whales remain sidelined; catalysts like TVL reversals or upgrades could shift the outlook.
