Cardano price fell by more than 20% between January 14th and January 25th, dropping to new local lows. On the surface, the ADA move looked bearish and unpleasant.
But something completely different was happening beneath the surface. While ADA prices have fallen, big money has quietly entered the market. Two bullish indicators explain why this decline attracted buyers rather than panic. And how will Cardano price react next?
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Huge sums of money accumulate as retail industry retreats
The first signal comes from wallet behavior. Data shows that large ADA holders (whales) were not selling on the decline. Instead, they started adding near the lows.
Wallets holding between 10 million and 100 million ADA have increased their balances since January 25, when prices hit the local rock bottom. Despite the slump in prices, the companies’ combined holdings increased from approximately 13.59 billion ADA to 13.62 billion ADA. At the current price of around $0.35, that total is worth more than $10 million.
Smaller but still influential holders also participated. Wallets holding between 1 million and 10 million ADA temporarily reduced their exposure during the decline. However, once the price of ADA stabilized, they returned as buyers. Their balance increased from approximately 5.6 billion ADA to 5.61 billion ADA (approximately $3.5 million) within a day.
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This accumulation is important because it happened while retail actions, i.e. small ADA wallets, were moving in the opposite direction. Smaller ADA wallets, which hold between 100 and 10,000 coins, continued to trim positions, showing hesitance and risk aversion.
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These groups began shedding positions just before 2026 and have been exiting throughout. That division is important. The wealthy tend to buy when they feel scared, while retailers often sell to relieve stress.
Two bullish indicators suggest the downside is losing momentum
The second layer of evidence comes from the chart itself. One indicator of momentum is the flashing of an early reversal signal that a whale may be targeting.
It is RSI (Relative Strength Index). The RSI measures momentum and helps identify when selling pressure eases. From December 18th to January 25th, ADA prices reached new lows. RSI was not. Instead, the RSI formed higher lows.
This is a standard bullish divergence. This suggests that sellers are losing control, even though prices still look weak. These signals often appear before a trend reversal, rather than after. When the low was formed, ADA price corrected more than 20% as part of a bearish pole. Although the recent decline in stocks has formed a bear flag, the strength of the RSI and whale accumulation pattern suggest that a breakdown may not actually occur.
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The second signal comes from the MFI (Money Flow Index). MFIs use a combination of price and volume to track the flow of funds into or out of an asset. From January 21st to January 26th, prices continued to decline. MFI has increased.
This tells us something important. Dip was being bought. Prices fell, but money flowed in rather than out. This confirms what wallet data already shows. Rather than sitting on the sidelines during the decline, big money became active.
If the RSI indicates momentum stabilization and the MFI indicates aggressive bullish buying, the likelihood of a clean breakdown decreases. Rally is not guaranteed. However, it greatly weakens the bearish view.
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Cardano price levels that will determine the next move
Cardano price levels are of paramount importance right now as the accumulation and momentum signals are in place.
ADA is currently trading around $0.35. The first major technical hurdle lies around $0.390. This zone marks approximately half of the previous decline and coincides with an important Fibonacci level. A break above this area will invalidate the bearish flag structure on the daily chart.
However, the first real resistance has to be the 20-day EMA, or exponential moving average. EMAs give more weight to recent prices and are useful for tracking short-term trend direction. The last time ADA retook this EMA was on January 2, when the price rose over 17%.
If ADA closes above the 20-day EMA again, momentum could change quickly. In that case, the top price levels around $0.427 and $0.484 will be the focus again.
On the downside, risks remain. If the price closes below $0.339 for the day, the chances of a recovery will weaken. A break below $0.332 will invalidate the bullish divergence setup and downside risks will increase again.
For now, the message is clear. The 20% drop didn’t threaten big money. Two bullish indicators show why. Whether the price continues depends on the closing price over the next few days.
