The majority of ADA holders are underwater, hurting sentiment.
On-chain data shows weak demand and ongoing distribution.
ADA risks further downside unless buying pressure returns.
Earlier this year, Cardano’s (ADA) price appeared poised for a run toward the $2 level.
That attempt ultimately failed, and the follow-through that many market participants anticipated never materialized.
Instead of reclaiming momentum, ADA’s price has steadily trended lower, posting a drawdown of roughly 55% over the past 90 days.
The prolonged decline has left a large portion of holders underwater, shifting sentiment from expectation to caution.
But will the cryptocurrency recover soon? Let’s find out.
79% of ADA Holders in Trouble
On-chain data from Santiment indicates a decline in holder profitability.
According to the image below, the share of Cardano’s circulating supply currently in profit has fallen to just 21%. This happened after the altcoin failed to halt its multi-week decline.
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As a result, a significant portion of ADA holders are now underwater, a condition that historically increases vulnerability to panic-driven selling during periods of increased volatility.
The last time Cardano’s profitability metrics reached comparable levels was in October 2023.
Historically, when a majority of supply slips into loss, the price action tends to remain under pressure for extended periods rather than snapping back immediately.
Further on-chain analysis reinforces the bearish thesis. In particular, Cardano’s Price–Daily Active Addresses (DAA) divergence remains firmly in negative territory.
This reading indicates that a corresponding increase in network activity does not support price action.
When DAA divergence stays negative for extended periods, it typically signals weakening demand beneath the surface, leaving price more vulnerable to prolonged consolidation or further downside.
Thus, if this remains the same, Cardano’s price might continue to consolidate around the same region. In a worst-case scenario, the market value could extend its correction.
Examining the daily chart, ADA’s price remains trapped within a descending channel, reinforcing the prevailing downtrend. B
The Bull Bear Power (BBP) remains in negative territory, indicating that selling pressure has yet to subside.
Volume dynamics add to the concern. On-Balance Volume (OBV) has fallen to its lowest level since November 2024, indicating persistent distribution rather than accumulation.
If these conditions persist, Cardano’s price risks slipping below the $0.30 psychological support.
That said, the structure is not irreversible. A shift in momentum, supported by improving volume and sustained buying pressure, could invalidate the bearish setup.
In that scenario, ADA could attempt a recovery toward the $0.50 region; however, such a move would require a clear shift in market participation rather than a short-lived bounce.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Victor Olanrewaju is a crypto analyst and reporter at CCN with deep roots in on-chain research and technical analysis. His crypto journey began in 2017, but it was the 2020 Uniswap airdrop that sparked a full-time pivot into the space.
With a foundation in copywriting, Victor honed his craft creating high-converting content for leading crypto brokers — most notably an XRP price prediction that ranked #1 on Google during the 2021 bull run.
He later joined AMBCrypto in 2022, where he combined storytelling with technical and on-chain analysis to cover key market narratives.
In 2024, he expanded his expertise at BeInCrypto, collaborating with analysts and using tools like Glassnode, Santiment, and IntoTheBlock to break down Bitcoin and altcoin trends.
At CCN, Victor covers the top cryptocurrencies, memecoins, macro shifts, blending real-time insights with deep-dive metrics.
He holds a Bachelor’s degree in Physics from the University of Ibadan, equipping him to simplify complex data for a wide audience. Follow his work or connect on LinkedIn or X.
