Cardano Latest Bearish Signal Raises Risk of a Drop to $0.17

Cardano is flashing a bearish signal that could precede another significant price decline, according to Ali Martinez, a popular market commentator.

Taking to X, Martinez highlighted a bearish shift in an important Cardano indicator, warning of potential downside risks. However, large ADA holders have yet to demonstrate a clear selling bias, making the $0.21 support level a critical area to watch.

Cardano Whales Show No Clear Selling Bias

Martinez explained that changes in the holdings of ADA whales, from 100 million to 1 billion tokens, have historically coincided with significant price movements. However, these large investors have held stable positions since October 10.

During this period, their combined holdings fluctuated between 2.72 billion and 2.76 billion ADA. This limited movement suggests that major holders have yet to establish their next line of movement. 

Consequently, Martinez is monitoring these wallets for signs of distribution, which could indicate that large investors are beginning to reduce their exposure to ADA. A sustained decline in their holdings could reinforce concerns about mounting selling pressure.

SuperTrend Indicator Flashes Bearish Warning

While Cardano whale activity remains stable, its SuperTrend indicator has turned bearish, raising concerns about ADA’s near-term outlook.

Martinez identified May 22 as the last time the indicator flashed a similar signal. At the time, ADA traded around $0.25 before plunging to around $0.135, marking a decline of about 46%. Rumors that Cardano founder Charles Hoskinson was leaving the ecosystem further intensified the downturn.

Although this previous correction highlights the potential severity of a bearish reversal, Martinez stressed that it does not guarantee that ADA will repeat the same price action. 

ADA Risks Falling to $0.17 if $0.21 Support Breaks

According to Martinez, $0.21 marks the lower boundary of Cardano’s rising price channel and represents a critical support level that could determine its next major move.

A daily close below this threshold would signal a breakdown of the channel, potentially exposing ADA to a decline toward $0.17. From $0.21, such a move would represent a drop of 19%. 

Crypto Tony Also Warns of ADA Downside

Meanwhile, Martinez is not the only analyst expressing concerns about Cardano’s price outlook. Widely followed crypto analyst Crypto Tony recently warned that ADA could fall to $0.19 after failing to overcome resistance around $0.23.

His projection suggests that ADA could face further losses if sellers maintain control around this resistance zone. Consequently, the token’s ability to reclaim $0.23 could prove important in determining whether it can regain upward momentum or face another downturn.

Nevertheless, ADA has continued to trade above the crucial $0.21 support level while attempting to break through the $0.23 resistance zone.

At press time, ADA traded at $0.2243, representing a 3.79% gain over the previous 24 hours. Despite this short-term recovery, the token remained down 4.44% over the past week and 3.7% over the past month.