- Cardano (ADA) is showing signs of a pullback after a strong rally, dropping 3.59% as holders take profits.
- On-chain data and technical indicators suggest increased selling pressure, with a possible retest of support at $0.71.
Cardano (ADA) is showing signs of fatigue after last week’s impressive 19% rally. On Tuesday, the token slipped 3.59%, trading around $0.78, suggesting that bullish momentum may be running out. The dip appears to be driven by profit-taking and growing on-chain signals of increased selling pressure.
According to data from Santiment, dormant wallet activity — as measured by the Age Consumed index — surged to its highest level since mid-April. This metric tracks previously idle coins that suddenly begin moving, often a precursor to sell-offs. When long-term holders start shifting tokens, it’s typically a signal of potential profit-taking or market repositioning.
Also read: Ripple Price Prediction: XRP Holds at $2.44 Amid Profit-Taking and SEC’s Push for Clear Crypto Rules
Further supporting this bearish view is Santiment’s Network Realized Profit/Loss (NPL) index, which recorded a sharp spike on Monday. This suggests many ADA holders are offloading their coins at a profit, adding to the downward pressure. If these tokens reach exchanges, the resulting liquidity may intensify selling momentum.
Adding to the caution, Coinglass’s ADA long-to-short ratio has dropped to 0.84 — its lowest level in over a month — indicating that more traders are betting on a decline than a rise. A ratio below 1 generally reflects bearish sentiment in the market.
Technically, ADA appears poised for a pullback. After breaking above its 200-day Exponential Moving Average (EMA) at $0.71 last Thursday, Cardano surged to test resistance at $0.84 — a key retracement level from its March high of $1.17. However, it failed to break through, consolidating just below it.
Now, ADA risks falling back toward the $0.71 support zone, where the 200-day EMA could act as a cushion. The Relative Strength Index (RSI) currently sits at 61, having retreated from overbought territory. A further decline below the 50 mark could confirm a stronger bearish trend.
Despite the short-term weakness, if ADA manages to reclaim and close above the $0.84 resistance, bulls could target the next level at $0.92, aligning with the 61.8% Fibonacci retracement.
For now, Cardano appears to be in cooldown mode — and investors should watch support levels closely as the market digests recent gains.