Cardano’s pain persists as long-term holders show signs of capitulation — but on-chain signals hint a floor may be forming
Cardano (ADA) remains under heavy selling pressure this Wednesday, trading around $0.16 after a brutal ~30% slump last week. Investor confidence and retail participation have cooled markedly, leaving the token stuck in a bearish pattern — even as some on-chain metrics suggest the bulk of long-term selling could be nearing an end.
Dormant supply surge points to capitulation among long-term holders
On-chain analytics from Santiment reveal a dramatic reactivation of previously dormant ADA in early June. Multiple spikes saw more than 20 billion ADA re-enter circulation, peaking with a massive 40.6 billion ADA movement on June 9 — the largest single spike recorded during the current sell-off. That activity interrupted the steady rise in the average age of ADA wallets, confirming that long-idle addresses were moved or sold amid market weakness.
Such large dormancy spikes are often interpreted as capitulation: long-term holders throwing in the towel and exiting positions. While further sales are still possible, these capitulation events can also mark the exhaustion of selling pressure and sometimes precede market bottoms — a potential positive if buying interest returns.
Retail and derivatives metrics show risk aversion rising
Retail sentiment has soured in tandem with price action. Derivatives data from CoinGlass shows Cardano futures open interest (OI) has fallen to $348.55 million — its lowest level since November 2024 and down from $585.35 million on May 12. A declining OI typically signals traders closing leveraged positions and stepping back from speculative risk, reducing the odds of a sharp short-term rebound.
Technical picture: odds favor sellers, but relief rallies possible
Price action remains tilted to the downside. ADA is trading just under $0.16 after a short-lived high of $0.1745 on Monday. Key technicals back the bearish case: the Relative Strength Index (RSI) sits near 39 — approaching oversold territory — and the MACD remains below zero, confirming dominant bearish momentum. Oversold readings could spark intermittent relief rallies, but there’s no clear sign yet of a sustained trend reversal.
Key levels to watch:
- Upside: a move above Monday’s $0.1745 high would open the $0.20 psychological level; regaining the $0.2205–$0.2275 zone would be required to substantially weaken the bearish outlook.
- Downside: a break below Saturday’s low of $0.1486 could expose ADA to a deeper slide toward major long-term support around $0.10.
Bottom line
Cardano’s short-term outlook remains fragile as retail interest wanes and technical momentum favors sellers. Still, the recent dormancy spikes suggest some long-term selling may have been flushed out — a dynamic that can precede stabilization if buyers step back in. Traders should watch open interest and the $0.1486 and $0.22 ranges for clues on which direction ADA’s next meaningful move will take.
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