Cardano(ADA) key support faces testing: Can $0.38 hold? On-chain data and market sentiment are now diverging

Cardano(ADA) has recently been stuck in a consolidation phase. After encountering resistance at the $0.41(50-day moving average) last week, the cryptocurrency fell to around $0.38 near a key support level on Tuesday, and market opinions on the next direction are beginning to diverge.

Whales Accumulating, Small Investors Selling — On-Chain Data Reveals Subtle Contrasts

On-chain data paints an interesting picture. According to Santiment tracking, from January 8th to Tuesday, large holders(whale wallets) holding between 10 million and 100 million ADA accumulated a total of 180 million tokens. This is often interpreted as a bottom signal — large funds are buying the dip.

Meanwhile, medium-sized holders(holding between 1 million and 10 million ADA) and retail investors(holding between 100,000 and 1 million ADA) sold a combined total of 500 million tokens during the same period. Market analysis suggests this structural fund flow indicates small and medium investors may be panicking and selling off, while whales are accumulating at “discount prices.” From a supply and demand perspective, this leaves room for ADA to rebound.

Derivatives Reveal True Sentiment: Defensive Signals Behind Bullish Sentiment

In the futures market, ADA’s short-term pressure is easing. Data from Coinglass shows that the long-to-short ratio(long-to-short ratio) for ADA reached 1.33 on Tuesday, hitting a one-month high. A ratio above 1 indicates long positions outnumber short positions, which is generally a positive technical signal.

However, other parts of the market are sending mixed signals. On-chain social activity(measured by media volume share) tracked by Santiment has fallen to 0.037%, a new low since early December, and continues to decline. When market discussion and participation decrease, short-term upward momentum often diminishes significantly.

More concerning is the flip in funding rates. Starting Tuesday, ADA’s funding rate shifted from positive to negative, meaning short sellers are paying long buyers. This typically indicates that market participants are adopting a more defensive stance, and market sentiment is becoming cautious.

$0.38 as a Critical Threshold: Breakthrough or Hold Will Determine Next Steps

From a technical perspective, the key zone is now locked in. After facing resistance at $0.41(50-day moving average) on January 6th, ADA dropped nearly 9% in less than two days, approaching the daily support at $0.38 again. Currently, the price is oscillating around this level.

Key point to watch is the daily close: if ADA closes below $0.38 on the daily chart, it may face a deeper correction, with the December 31st annual low of $0.32 becoming the next target.

Technical indicators currently do not provide a clear signal. The daily RSI remains around neutral 50, reflecting ongoing battle between bulls and bears; the two MACD lines are converging(approaching a convergence), indicating that trend strength is not yet decisive. This is a typical “uncertain direction” pattern.

However, if support at $0.38 holds, ADA could initiate a rebound. The short-term target would then shift back to the $0.4150-day moving average, which will become the next focus for attack or defense.

The current real-time price of ADA is $0.41, with some buffer before reaching the critical support. But market silence and the shift in funding rates suggest investors should remain cautious and wait for confirmation signals from the daily close.