Cardano Plunges 21% in October… Will it Tumble to $0.15 as Whales Depart?

▲ Cardano (ADA)/AI generated image ©

After Cardano (ADA) plunged 21% in October, it is barely defending its support level below $0.20. However, concerns about further declines are growing due to a combination of decreasing holdings by whale investors and a reduction in futures open interest.

According to investment media FXStreet on November 2 (local time), Cardano's decline has stabilized after plummeting approximately 8% last Thursday, and it is now consolidating above the $0.1894 support level. However, short-term bearish pressure persists as large investors' trading activity shrinks and retail investors' demand for derivatives decreases. Notably, having fallen 21% in October alone and trading below key moving averages, there is a lack of momentum for a technical rebound.

On-chain metrics revealed a divergence between increasing market interest and actual buying demand. Cardano's Social Dominance rose to 2.49% today, marking its highest level since late June. This was attributed to news that ADA and Midnight tokens were not stolen in the recent Binance hacking incident. However, according to Santiment, the share of ADA circulation held by large wallets (10 million to 100 million ADA) decreased from 38.03% last month to 37.45%. The proportion of ADA supply in profit also plummeted from 28.36% to 14.77%, indicating a weakening preference for risk assets among large-scale investors.

Retail investors' trading participation is also decreasing. According to CoinGlass data, ADA futures Open Interest (OI) declined from 2.25 billion ADA last week to approximately 2 billion ADA. This is interpreted as a signal that investors are closing existing positions rather than expanding new ones. FXStreet pointed out that if the reduction in whale investors' holdings continues this month, Cardano could extend its October downtrend.

Technically, Cardano maintains a bearish structure, trading below both its 50-day Exponential Moving Average (EMA) at $0.2179 and its 200-day EMA at $0.2408. The drop below the previous uptrend line at $0.2019 is also considered a signal of a bearish reversal. The daily Relative Strength Index (RSI) is near 32, approaching the oversold zone, and the Moving Average Convergence Divergence (MACD) remains in negative territory, indicating sustained selling pressure. If a rebound occurs, $0.2019 will be the first resistance level, followed by $0.2179 and $0.2408, which must be recovered sequentially.

If the downtrend resumes, the key price is the August 30 low of $0.1894. If this support level breaks, the August 18 low of $0.1712 and the July 27 low of $0.1537 are successively presented as the next downside targets. FXStreet assessed that while Cardano is currently defending $0.1894, bearish factors such as decreasing whale holdings, reduced futures open interest, and a break below key moving averages are accumulating. Despite the rise in social dominance, a genuine recovery in investment demand has not been observed, and short-term price movements are dominated by downward pressure.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*