Cardano (ADA) Price Rebound at Risk as Bearish Sell-off Looms

The Cardano price rebounded 32% to reach a 3-month peak of $0.37 after Ripple’s (XRP) much-heralded victory against the Securities and Exchange Commission (SEC). Can the bulls soak up the selling pressure from the long-term holders booking profits? 

Last week, Cardano price briefly reclaimed $0.35 for the first time since the SEC listed ADA among the tokens classified as security back in June 2023. On-chain data shows that Cardano could be due for another retracement below $0.30 as bearish investors look to capitalize on the recent ADA price rebound. 

Cardano Long-Term Holders Are Closing their Positions

After holding at a loss for over a month, many investors are taking advantage of the recent price rebound to cut their losses. According to Santiment, Cardano Age Consumed has risen considerably since the ADA price crossed $0.30 on July 13.  

The chart below shows that within 48 hours of Ripple’s (XRP) victory, Cardano Age Consumed soared by 133% between July 12 and July 14. 

By multiplying the number of tokens recently traded by the number of days since they last moved, Age Consumed evaluates the trading sentiment among long-term investors. 

A significant increase in Age Consumed suggests that many long-held tokens are being traded, which is bearish for price. 

Evidently, the network-wide sell-off frenzy has already triggered a 16% price reversal between July 14 and July 17. Hence, Cardano bulls may find it difficult to hold the $0.30 support level without a significant drop-off in Age Consumed. 

Whales are Taking Hawkish Positions as the Recovery Momentum Cools

Furthermore, the drop in trading activity among ADA whale investors also jeopardizes Cardano price rebound chances. After making big moves following Ripple’s Victory vs. SEC, the whales have reduced their trading activity in each of the last 3 trading days. 

At the recent peak on July 14, the whales carried out 2,178 transactions. But at the close of July 16, it had dropped by 23% to just 1,778 whale transactions. 

The Whale Transactions metric essentially adds up the number of transactions that exceed $100,000 daily. This helps to track real-time changes in the trading activity among whale investors. 

A persistent downtrend in whale transaction count means that the whales are increasingly looking to sit on the fence. This could cause a drop in liquidity and trigger bearish sentiment among strategic retail investors. 

Given how the drop in whale transactions has often correlated with Cardano price downswings, it could be a critical driving factor in the coming days. 

ADA Price Prediction: The Bears Could Flip $0.30 Again

Considering the drop in whale activity and the sell-off frenzy among long-term holders, ADA will likely drop below $0.30 again. However, as seen below, 247,540 investors had bought 1.96 billion ADA coins at the minimum price of $0.30. If they can mount a formidable buy-wall, ADA could continue its price rebound mission. 

However, with the bearish momentum building up, ADA bears will likely break that support level and force a downsizing toward $0.28. 

Still, the bulls can regain control if the Cardano price rebounds above $0.35. However, a potential sell-off from the 428,000 investors that bought 3.72 billion ADA at the average price of $0.34 could slow down the recovery. 

But if that resistance level does not hold, the Cardano price rebound mission could head toward $0.40.