Cardano is trying to stabilize after a difficult period. ADA gained about 1.8% over the last 24 hours, but the overall picture remains weak. The altcoin is still down nearly 9% over the last seven days, and the price of Cardano is collapsing and still remains below key short-term trend levels.
At first glance, the movement looks like a typical continuation of the downward trend. However, when we look together at market share, the behavior of holders, and positions in the derivatives market, the situation becomes more complex. The sale may have a second bottom here.
Cardano is collapsing as spot interest plummets.
Weakness began with a decline in market share, not just price.
On January 6, Cardano's trading volume on decentralized exchanges peaked at nearly 1.49 million USD – analysts at BeInCrypto indicate. On the same day, ADA also reached its highest price in 2026. Since then, both the price and activity have started to decline simultaneously.
By January 22, spot trading volume fell to around 68,552 USD (data still incomplete), which is over 95% in just over two weeks. This data pertains only to spot trading, that is, actual buy and sell transactions (exchanges), without financial leverage. A sharp drop in volume usually indicates a departure of retail investors.
Note: Spot volume on DEX reflects organic demand for tokens, as transactions are mainly settled on-chain, without leverage, forced liquidations, or market maker support.
This drop in activity coincided with a technical trend change.
Cardano lost its 20-day exponential moving average (EMA) in mid-January. The EMA indicator places greater weight on recent prices and often illustrates the short-term direction of the trend. Losing this level often signals that the advantage is shifting from buyers to sellers.
This pattern has been important for ADA before.
At the beginning of October, the loss of the 20-day EMA preceded a 55% drop until December. A similar loss from December 11 to 31 caused a 25% correction.
This time, after ADA fell below the 20-day EMA, the share of spot investors did not stabilize. The situation worsened. As fewer and fewer people bought on the spot market, the price fell faster, creating space for aggressive short positions.
This is where the second bottom of this story begins.
Whales increase purchases during weakness when short positions dominate the market.
When spot investors left the market, large holders of ADA did not retreat.
Addresses holding over 1 billion ADA began accumulating around January 14, even as the price of Cardano continued to fall. This group increased their total holdings from 1.92 billion ADA to 2.93 billion ADA, buying about 1.01 billion ADA during the correction. At current prices, this means accumulation of around 360-380 million USD, despite negative price momentum. Most importantly, they are still holding this asset despite declines.
Shortly after, a second group of whales followed. Wallets with 10 million to 100 million ADA began to buy more on January 17, the day Cardano completely lost its 20-day exponential moving average (EMA). Their holdings increased from 13.61 billion ADA to 13.64 billion ADA, or about 30 million ADA, which translates to roughly 11 million USD at current prices.
Timing is key. Whales did not buy during market strength. Both groups only stepped in after breaking the trend, after weakening interest, and when the bearish structure was already obvious. Such behavior suggests taking positions during visible weakness, rather than chasing gains.
Meanwhile, investors in the derivatives market went in the opposite direction.
The loss of trend support and the collapse of spot volume made the bearish scenario obvious. Numerous short positions on perpetual contracts worth 22.12 million USD appeared. On Binance, ADA is now strongly bearish: the threat of liquidation for short positions is about 2.5 times higher than for long ones.
This imbalance matters.
When spot players leave the market and short positions multiply, the price can spike sharply even with minimal buying. Whales accumulating coins at that time are often preparing for a quick return of the trend or forced increases due to short liquidations.
This shifts attention to structure and key levels.
Key price levels of ADA.
On the 12-hour chart, Cardano collapsed from a head and shoulders structure around January 20. This breakout likely triggered the last wave of spot selling and encouraged the opening of additional shorts.
However, the momentum no longer confirms further declines.
The Money Flow Indicator (MFI) has started to rise, and the price remains close to recent lows. The MFI tracks buying and selling pressure, taking into account both price and volume. When it rises with price stabilization, it often indicates accumulation of dips rather than panic. This may indicate a return of spot players when the MFI breaks the downtrend line, leaving the threat mainly for short positions.
Pressure to liquidate shorts appears around 0.37 USD. Breaking this level will start forcing short closures. Above 0.39 USD, liquidation pressure clearly increases. A rise to 0.42 USD would expose the vast majority of short-term shorts.
Bears will regain full control only if ADA breaks down and stays below 0.34 USD. A sustained move below this level would negate the stabilization scenario and reopen the path to earlier lows.
By this time, Cardano remains between the weakening share of retail players and the growing confidence of whales. Spot players may have retreated, but the current positioning suggests that the move may not be over.
To read the latest analysis of the cryptocurrency market from BeInCrypto, click here.
