- Cardano (ADA) hovers near $0.56 as rising dormant wallet activity and declining blockchain usage signal increased selling pressure.
- Bears now target the $0.50 support level, with technical indicators pointing to further downside.
Cardano (ADA) is on shaky ground as bearish pressure intensifies, with the token trading near $0.56 on Wednesday following a steep 13% drop last week. Market indicators are flashing red, and on-chain data points to a troubling rise in dormant wallet activity—often a precursor to heightened selling pressure.
Data from Token Terminal reveals a sharp decline in ADA’s fee generation this year, falling from $663,400 in January to just $53,000 by April 9. This drop signals waning blockchain usage, a key concern for investors betting on long-term growth.
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Adding to the bearish case, Santiment’s Age Consumed index—which tracks the movement of long-dormant tokens—has shown a significant spike this week. Historically, such spikes have preceded market downturns for Cardano, as older tokens re-enter exchanges, increasing potential sell-offs. The latest surge marks the highest level since January and suggests that more downside may be ahead.
Meanwhile, Coinglass data shows ADA’s spot netflow has remained negative since mid-March, with outflows reaching $21.08 million this week. This persistent trend indicates that investors are moving ADA off exchanges, likely preparing to sell or shifting into safer assets.
From a technical perspective, ADA recently breached the critical 61.8% Fibonacci retracement level at $0.67, a key support zone. Last week’s dip brought it down to $0.51 before a modest rebound. Now hovering at $0.56, ADA remains vulnerable, with the $0.50 support level—the year-to-date low from February 3—firmly in the bears’ sights.
The Relative Strength Index (RSI) currently sits at 44 and is trending downward, reinforcing the bearish sentiment.
Unless Cardano can reclaim key technical levels and reverse its fee decline, the path of least resistance appears to lead lower. Traders should keep a close eye on $0.50 as the next critical test in ADA’s 2025 trajectory.
