Cardano (ADA) price has staged a strong recovery in recent weeks, climbing from around $0.14 to briefly approach the $0.20 mark. The move has brought ADA back into focus as bulls attempt to extend the recovery and push the price higher. However, after the latest pullback, traders are now questioning whether ADA has enough momentum to continue its upward move or if the recent rally is starting to lose steam. Can ADA reclaim $0.20 and continue higher, or is a deeper correction now on the horizon?
ADA Whale Activity Adds to Downside Pressure
On-chain data points shared by an analyst, Ali, point to a gradual reduction in large ADA holders. The number of wallets holding between 1 million and 10 million ADA fell from 2,370 on August 2 to 2,340, indicating that 30 whale addresses have moved out of this holding range. While this alone does not confirm widespread selling, the decline is notable because it comes after ADA’s strong recovery and could reflect profit-taking or redistribution among larger holders.
A continued decline in whale holdings could signal that larger market participants are using the rally to reduce exposure, potentially limiting upside and increasing the probability of a short-term pullback. Conversely, stabilization or renewed accumulation among these wallets would weaken the bearish interpretation and support the case for another attempt at $0.20.
Bearish Signals Increase the Risk of a Deeper ADA Correction
The technical setup becomes more cautious when the broader momentum signals are considered together. Cardano’s MVRV ratio has crossed below its 7-day moving average, creating another warning that the recent upside momentum may be weakening. The Tom DeMark Sequential has also printed a sell signal on the daily chart, indicating that the current advance could be entering a period of exhaustion.
None of these signals confirms a trend reversal in isolation. However, their convergence becomes more significant if ADA is rejected near $0.20. In that scenario, traders could see the $0.17 channel midpoint tested first. A break below this support would increase the probability of a move toward $0.155 and potentially $0.144. In contrast, a recovery in MACD momentum alongside a break above $0.20 would invalidate much of the bearish setup.
ADA Technical Structure Weakens as MACD Nears Bearish Crossover
ADA continues to trade within an ascending channel, but momentum is showing early signs of deterioration. The MACD line is moving closer to a bearish crossover below the signal line, suggesting that bullish momentum is fading after the recent recovery. If the crossover is confirmed, it would strengthen the case for a short-term correction, particularly if ADA fails to reclaim the $0.20–$0.202 resistance zone.
From a price-structure perspective, ADA is still holding above the channel’s key mid-range support near $0.17. This makes $0.17 the most important level for bulls in the near term. A successful defence could allow buyers to regain momentum and retest $0.20, while a break below it would weaken the ascending channel structure and expose $0.155, followed by the lower boundary near $0.144.
The MACD setup is therefore particularly important for traders: a confirmed bearish crossover combined with a rejection near $0.20 would strengthen the downside case, while a bullish MACD reversal before the crossover could keep the recovery intact.
Is ADA’s Rally Sustainable?
Cardano’s recovery remains technically intact, but the setup is becoming increasingly fragile as momentum indicators turn bearish. The $0.20–$0.202 resistance zone is the key hurdle for bulls; a breakout above it could revive the uptrend and open the path toward $0.22. However, failure to clear this area, combined with a confirmed MACD bearish crossover and weakening on-chain momentum, could send the ADA price back toward $0.17. A daily close below that support would put $0.155 and $0.144 in focus. For now, traders should treat $0.17 as the key line separating a healthy pullback from a deeper bearish reversal.
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