Cardano (ADA) continues to consolidate between the $0.23 and $0.30, with whales controlling nearly 68% of the supply. With more than two thirds of the supply belonging to the whales, ADA prices could fluctuate wildly.
According to Santiment, an on-chain data tracking system, Cardano’s key stakeholders have slowly but surely accumulated ADA. This stealthy accumulation has been happening since December 2023. Whales accumulate stealthily because they’re trying to buy large amounts of an asset without pushing the price up too early or alerting the market.
Why do whales accumulate tokens stealthily?
In case a large trader – such as a fund, an angel investor, or an institutional player – begins accumulating its assets through aggressive open market buying, two factors come into play: First, prices will rise rapidly due to low liquidity at certain levels. Crypto assets are particularly sensitive to significant buying pressures in the market; thus, even mild and consistent buying leads to rapid price hikes. This is detrimental to the large trader’s strategy because each purchase results in higher acquisition costs.
Second, after noticing accumulation, other traders start buying in droves. This process is known as front running and increases demand, which makes the buying process even more expensive and eliminates the discount the whale was trying to obtain in the first place.
Therefore, to avoid getting caught red-handed, whales disperse their buying power into small parts distributed at varying intervals across several exchanges and liquidity pools. This technique is known as order slicing or accumulation via icebergs. The idea is to disguise your intentions so that your transactions appear just like any regular market activity.
There is also a psychological factor here: Markets function based on perception; therefore, when market participants learn about accumulation activities, they realign themselves accordingly.
ADA daily chart shows the formation of a bear flag
On the daily chart, ADA is trading inside a bear flag, which eventually will further crash the prices. A bear flag is a bearish continuation pattern that appears after a strong move down in price. It starts with a sharp sell-off, known as the flagpole, where sellers aggressively push the market lower and momentum turns heavily bearish.
After this drop, the price usually enters a period of consolidation, forming a small upward or sideways channel called the flag. This phase can look like a recovery on the surface, but it’s often just a temporary pause rather than a real trend reversal.
But inside the flag, there is the constant push and pull of short-term buyers trying to catch a rebound while sellers try to cash in or initiate short positions. The buying force is always significantly weaker than the first selling force, hence the failure of the price to break out upward. Instead of a reversal, all we see is a brief intermission in the downtrend before continuing the fall.
The bear flag failure takes place when prices fall below the flag’s support level, leading to a new round of selling, which may even resemble the initial move in its magnitude due to momentum buildup. To conclude, bear flag formation serves only as a short rest for the prevailing trend.
Why do whales keep buying if they foresee a further crash?
So the question is, if the prices are crashing and will continue to crash, why are the whales still buying? The answers lie in the weekly. The daily chart often contains a lot of short-term volatility, creating choppy and noisy price movements that can make it harder to identify the overall direction. In contrast, the weekly chart smooths out these smaller fluctuations and provides a clearer view of ADA’s broader trend and structural price movement, making it easier to understand the bigger market picture without being distracted by intraday swings.
ADA’s troughs are high demand buying zone
As shown in the chart below, the ADA prices are at the bottom or are forming the trough. And the current price level has been a historically buy zone, as the fixed volume profile shows a lot of trading activity
A fixed volume profile is one other dimension to add to this scenario. The reason why we see much trading activity within this price level is that this particular level contains a great deal of past deals that have been done by buyers and sellers—basically a “value area.” From a structural standpoint, these high-volume areas typically become magnetic areas for testing and expansion.
In the event that price moves back into these areas following a broader bearish move or a period of consolidation, it could be a sign of either the conclusion of the distribution process or of the absorption of selling pressure through accumulation. In situations where accumulation is taking place, more dominant market participants generally take up positions in these highly liquid areas without causing the price to rise significantly.
It is precisely the combination of sustained interest and historical volume that renders this region so critical. The market has a tendency to exhibit mean reversion behavior in relation to these areas—that is, the price will bounce back towards “fair value” before embarking on a new leg of the trend. Assuming that buying interest is present, this valley provides the base for such a reversal pattern.
However, the key confirmation is not just location, but behavior: sustained rejection of lower prices, shrinking downside momentum, and gradual expansion in upward volatility would be needed to validate that this trough is evolving into a durable accumulation base rather than just a temporary consolidation inside a larger downtrend.