- Cardano (ADA) is under pressure, trading near $0.56 after a 13% weekly drop, with increasing dormant wallet activity and declining network fees signaling bearish momentum.
- If the downtrend continues, ADA could retest its yearly low of $0.50 unless it rebounds toward the $0.66 resistance level.
Cardano (ADA) finds itself in a precarious position this week, trading at approximately $0.56 on Wednesday after a sharp 13% drop last week. The recent price decline comes amid a wave of bearish technical indicators and concerning on-chain metrics—signaling that the road ahead could see even more downward pressure.
Dormant wallets awaken, hinting at a selloff
One of the most telling warning signs comes from Santiment’s Age Consumed index, which tracks the movement of long-held ADA tokens. A significant spike on Monday—its highest since mid-January—indicates that previously dormant holders are moving their coins, often a prelude to increased sell pressure. Historically, such activity has been a precursor to price dips, as tokens moved from cold wallets to exchanges tend to flood the market.
Further fueling the bearish sentiment, Coinglass data shows ADA’s spot netflow has been consistently negative since mid-March. Just this week, the platform recorded a net outflow of $21.08 million—another indication that investors are offloading their holdings.
Declining network activity adds to the downside
ADA’s on-chain fundamentals are also flashing red. According to Token Terminal, Cardano’s fee generation—a key indicator of network usage—has plunged from $663,400 in January to just $53,000 as of April 9. This sharp drop in fees points to waning blockchain activity and user engagement, which typically correlates with weaker price action.
On the technical side, ADA has breached the 61.8% Fibonacci retracement level from its August 5 low to December 3 high and recently retested its February 28 support level at $0.58. While there was a slight bounce to $0.56, the momentum remains bearish. The Relative Strength Index (RSI) on the weekly chart sits at 44 and is trending downward, reinforcing the bearish narrative.
What’s next for ADA?
If the bearish momentum continues, ADA could revisit its 2025 low of $0.50, a critical support level last seen on February 3. However, in a reversal scenario, ADA may attempt to reclaim ground by testing the 50-week Exponential Moving Average (EMA) around $0.66.
For now, caution is key as ADA’s on-chain signals and technical structure both point to further downside unless bullish catalysts emerge.
