• Cardano price trades down 2.81% so far on Tuesday, extending losses after a brief recovery on the previous day.
• Santiment data show that whales are offloading tokens, increasing selling pressure.
• The technical analysis suggests a downside lean as price holds below the long-standing descending trendline.

Cardano (ADA) price slips below $0.28 at the time of writing on Tuesday after a slight recovery the previous day. Weakening on-chain and derivatives data support a bearish outlook, as whale wallets are reducing exposure alongside negative funding rates. On the technical side, price action holds below the long-standing descending trend line, keeping the downside bias intact.

Whales offloading tokens, negative funding rates trigger bearish sentiment

Santiment’s Supply Distribution data supports a bearish outlook for Cardano, as large-wallet holders (whales) are offloading tokens.

The metric indicates that whales holding between 100,000 and 1 million ADA tokens (red line), 1 million and 10 million ADA tokens (yellow line), and those holding between 10 million and 100 million ADA tokens (blue line) have shed a total of 260 million tokens since February 24 to Tuesday, thereby increasing selling pressure.

On the derivatives side, CoinGlass funding rates data also support a bearish outlook. The metric flipped to a negative rate on Monday and stands at -0.009% on Tuesday, indicating shorts are paying longs, suggesting bearish sentiment toward ADA.

Apart from whale selling and negative funding rates, the broader risk-on sentiment remains dampened by ongoing US-Iran war tensions, which continue to weigh on risky assets such as Cardano.

US Secretary of State Marco Rubio stated that the US is preparing for a major uptick in attacks in Iran over the next 24 hours. This comes after US President Donald Trump said that a big wave is yet to come, underscoring the risk of a prolonged war. Moreover, the State Department urged US citizens to depart immediately from countries in the Middle East due to serious safety risks. This prolonged conflict continues to weigh on investors’ risk appetite, which does not bode well for cryptocurrency prices.

Cardano Price Forecast: ADA’s descending trendline caps recovery

Cardano price is trading at $0.26 as of Tuesday, after a mild recovery on the previous day. The near-term bias is neutral with a downside lean as price holds below the long-standing descending trendline, which was last rejected around the $0.29 area on Sunday, and remains capped well under the 50- and 100-day Exponential Moving Averages(EMAs) located above the price at $0.30 and $0.37, respectively.

The Relative Strength Index (RSI) on the daily chart at 43 stays below the 50 midline, indicating subdued bullish momentum after the brief spike toward $0.30. The Moving Average Convergence Divergence (MACD) line trades marginally above the signal line but close to the zero mark, with a modestly positive histogram, suggesting only shallow upside pressure while the broader structure stays under bearish control.

Immediate resistance emerges at the trendline area near $0.29, with the horizontal barrier at $0.32 following as a stronger cap if buyers extend a bounce. 

On the downside, initial support is seen at the recent swing area near $0.25, ahead of the horizontal line at $0.24, which guards against a deeper retracement. 

A daily close above $0.29 would open the path toward $0.32 and soften the current downside bias, while a break below $0.24 would reassert the broader downtrend and expose lower levels of February 6 at $0.22.

(The technical analysis of this story was written with the help of an AI tool.)