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- The price of Cardano fell below $1 on Thursday as the prospect of fewer Fed rate cuts in 2025 sparked a sharp market-wide selloff.
- Large transaction volumes decreased by $13 billion between December 2 and 18, signaling a lack of interest among whale investors.
- Technical indicators highlight further downside risks for ADA if the $0.9500 support fails.
The price of Cardan fell below $1 on Thursday as traders reacted to the US Fed’s hint of smaller rate cuts in 2025. Data on the chain showed a steady decline in heavy demand for ADA over the past two weeks.
Cardano falls below $1 amid post-FOMC selloff
On Wednesday, the US central bank (Fed) concluded its December FOMC meeting by cutting the interest rate by 25 basis points.
But despite matching analyst expectations for a third consecutive rate cut, the accompanying statement hinting at fewer cuts in 2025 sent bearish tremors across the crypto market.
Cardano (ADAUSDT) Price Action | December 19, 2024
The chart above shows ADA prices falling as low as $0.8800 on Thursday, bringing its losses on the weekly time frame to the 25% mark.
Although Cardano’s continued decline is aligned with the global market decline following the Fed’s dovish outlook. The 25% loss has left ADA behind competing Layer-1 coins such as ETH, SOL and AVAX.
ADA demand for whales falls by $13 billion, increasing downside risks
When a mega-cap asset like Cardano underperforms the market average, it signals the presence of long-term internal bearish catalysts.
Data trends in the chain show ADA has struggled to attract demand since Dec. 2, two weeks before the FOMC meeting triggered a market-wide selloff on Wednesday.
As an indication of this attitude, the IntoTheBlock chart below tracks the daily volume of individual transactions that exceed $100,000 in value.
This serves as a proxy to monitor the trading of large investors on the blockchain network.
Cardano Whale Transactions vs. ADA Price | Source: IntoTheBlock
Looking at the chart above, Cardano large transactions totaled $15.8 billion on December 2nd.
But since then, whale investors have gradually reduced their demand for ADA.
The latest data shows that only $2.9 billion worth of large transactions took place on December 18, reflecting a $13 billion drop from the peak of the monthly timeframe.
Such a huge drop in whale transactions could be negative for two key reasons.
First, high transaction volumes often indicate significant market activity by institutional or high net worth investors.
A sharp decrease in such activity indicates a weakening of confidence among Cardano’s largest shareholders, potentially discouraging smaller retail investors and triggering further selling.
Second, reduced whale participation implies lower liquidity in the ADA market and increased risk of rapid price declines during a crypto selloff.
This partly explains why the price of ADA fell further than ETH, SOL and AVAX.
Cardano Price Forecast: $0.8500 Support in Danger
After a 25% decline in the past week, technical indicators Donchian Channel (DC) and Volume Delta now paint a bearish picture for Cardano’s short-term price action and market momentum.
The Donchian channel reflects that ADA is currently testing its lower boundary at $0.8688, which is a critical support level.
The upper limit at $1.3264 highlights significant resistance, while the midline at $1.0976, which corresponds to the previous price consolidation, now serves as a strong resistance zone. A breakout of the median line in recent sessions suggests a shift in sentiment from neutral to bearish, with a clear dominance of sellers.
Trading prices close to the lower limit implies increased downside risks. If ADA fails to hold above the $0.8500-$0.8688 range, the next likely support zone is near $0.8000.
Cardano price forecast
Volume Delta adds additional bearish momentum confirmation. A delta of -88.06 million clearly shows that sell-side activity is significantly outpacing buy-side interest. This massive selling pressure is consistent with a decline in whale activity, highlighted by a $13 billion drop in large trades since December 2.
The lack of significant green volume bars signals weak buyer confidence, making it unlikely that bulls can stage a significant recovery in the short term. Combined with the Donchian channel, this suggests that even if ADA moves back towards the psychological level of $1.00, it would face strong resistance at the midline of $1.0976.
If the sell side dominance continues, ADA is likely to break below $0.8500, with the next major support near $0.8000.
