The Cardano price is now significantly on sale. Since the beginning of December, the price has dropped by nearly 45% and recently touched $0.26, followed by a recovery towards $0.28. On paper, this seems like a strong buying zone.
Early signs of reversal are also appearing on the chart. Retail investors are starting to accumulate again. However, large holders, known as whales, remain cautious. Despite the discount and improving metrics, there is a lack of conviction to buy. Three data points explain why.
Bullish divergence in a descending channel has yet to unite whales.
Technically, the Cardano chart is mixed.
Since November, ADA has been moving within a descending channel, making lower highs and lower lows between parallel lines. This indicates a controlled downward trend, no panic selling, as the channel remains intact. However, the risk of decline still exists.
At the same time, momentum is improving.
Between November 21 and January 31, ADA made a lower low. During the same period, the Relative Strength Index (RSI) recorded a higher low. The RSI measures momentum on a scale from 0 to 100. If the price declines but the RSI rises, this indicates decreasing selling pressure. This is called bullish divergence. It usually appears at the beginning of a trend reversal.
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Still, whales do not respond unanimously despite the reversal signal.
On-chain data shows that three large wallet groups are behaving differently:
Wallets holding more than 1 billion ADA slightly increased their holdings after January 28, but did nothing during the dip at the end of January.
Wallets with 100 million to 1 billion ADA reduced their holdings from about 2.58 billion to 2.47 billion ADA.
Wallets with 10 million to 100 million ADA increased their holdings from about 13.37 billion to 13.50 billion ADA.
If whales truly believe in a recovery, these groups typically accumulate together. This is not happening now. The net buying power is only 20 million ADA. The reason is the risk.
As long as ADA remains near the bottom of the descending channel, the chance of a downward breakout exists. A confirmed breakout could cause a further 29% decline, which is explained below at the price. Due to this structural risk, large investors remain cautious, even now that bullish divergence is occurring.
Weak social dominance and cautious retail purchases are slowing momentum.
The second threshold is sentiment.
Social dominance measures how much attention a coin gets compared to the rest of the crypto market. This measures the share of online discussions focused on that asset. Increasing dominance often indicates more speculation and inflow.
For Cardano, social dominance peaked around 1.08% in November 2025 when ADA hit $0.59. Since then, it has been steadily declining. It now stands around 0.047%, which is close to a multi-month low.
Historically, this is important.
At the beginning of December, a local social peak led to a rise of 12%.
At the end of December, a rise of 16% followed another peak.
As social interest increases, the price often follows. Now that interest is declining. Without narrative momentum, whales have little motivation to take large positions. Retail is more positive but remains cautious.
Since January 22, ADA has shown daily net outflows from exchanges. Outflows mean coins are leaving exchanges, usually to be held rather than sold. This suggests buying pressure.
Daily net purchases peaked around $14.9 million on January 31 and later cooled off to about $2.8 million. There have been no major selling days since the end of January.
This shows that retail investors are slowly starting to buy more during dips. But the pace is moderate. Without more social attention, retail demand alone cannot strongly reverse the trend.
Weak smart money and important Cardano price levels keep whales defensive.
The latest warning comes from 'smart money' and the price structure.
The Smart Money Index looks at how experienced traders position themselves during different market times. The goal is to show rational behavior rather than emotional trading.
This index has recently fallen below its signal line and declined further. In previous rallies, such as early January, this index usually rose before the price went up. The current weakness shows that professional traders are not yet preparing for recovery. This also reinforces caution among whales.
From a technical perspective, multiple levels are now determining the expectation for February.
At the top, ADA must first reclaim $0.319. This would instill more confidence. A move above $0.376 is even more important. Then the downward trend breaks, and the structure changes from bearish to neutral. This could lead to collective whale purchases.
At the bottom, $0.268 remains important. A confirmed drop below this level also means a breakout from the channel downward and could bring the price towards $0.188. This is a potential target for a 29% decline from the breakout point.
As long as the price remains between $0.268 and $0.319, uncertainty prevails. The bullish divergence shows that selling pressure is decreasing. But due to weak social momentum, whales behaving dividedly, and smart money not providing support, confidence remains low. As long as sentiment does not improve and key resistances do not break, a recovery of Cardano is possible but not certain.