Cardano Price Forecast: ADA Set To Crash To $0.50 After Correction To Liquidity Zone & Increasing Dormant Wallet Activity
Overview: ADA in Decline After Bullish Exhaustion
After a promising start to 2025, Cardano (ADA) now faces renewed bearish pressure, with analysts predicting a possible drop to $0.50. This outlook follows a correction to a key liquidity zone, which has historically acted as both a support and resistance area. Coupled with increasing dormant wallet activity, the signs point to a possible wave of sell-offs and market repositioning.
As of the second week of April, ADA is trading at approximately $0.58, down from its March high of $0.71. While the correction appears modest on the surface, on-chain data and technical indicators suggest this may just be the beginning of a larger downward trend.
The Liquidity Zone: What It Means for Price Action
One of the key reasons behind ADA’s current vulnerability is its interaction with a high-volume liquidity zone between $0.58 and $0.62. These zones typically represent areas where institutional and retail traders have placed a large number of orders, leading to heightened volatility when approached.
ADA’s price recently dropped into this zone and has since shown little momentum to break back above it. In technical terms, this area has now flipped into a supply zone—where sellers overpower buyers. If ADA fails to hold above the $0.58 level, analysts expect the next support to emerge at the psychologically critical $0.50 mark.
A clean break below $0.58 could trigger cascading sell orders and liquidations, especially among leverage traders and weak hands. This scenario mirrors a similar pattern from late 2023, when ADA fell from $0.45 to $0.24 after failing to hold a key support level.
Dormant Wallets Spring to Life
Another red flag signaling a possible ADA downturn is the spike in dormant wallet activity. According to data from on-chain analytics platforms like Santiment and IntoTheBlock, a growing number of long-inactive ADA wallets have begun moving tokens, possibly in preparation for offloading them on the market.
Historically, spikes in dormant wallet movement often precede sharp price drops. This pattern suggests that long-term holders—those who have kept ADA untouched through previous market cycles—are now becoming active again, likely anticipating better exit opportunities during this period of liquidity.
This behavior is generally considered bearish, as it implies a shift in long-term holder sentiment from conviction to caution. The increased movement of these funds into exchanges, particularly Binance and Coinbase, supports the idea that some whales and early investors may be preparing to reduce exposure or take profits.
Technical Indicators Paint a Bearish Picture
From a technical standpoint, several key indicators support the bearish thesis:
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Relative Strength Index (RSI): The daily RSI has dipped below 45, a level that signals weakening bullish momentum and an increased likelihood of continued selling pressure.
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MACD (Moving Average Convergence Divergence): A bearish crossover on the daily MACD confirms the downtrend’s strength, reinforcing the potential for further decline.
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Volume Profile: Trading volume around $0.58 is thinning, suggesting reduced buying interest and vulnerability to sharp drops if selling intensifies.
What Should ADA Holders Do?
With the possibility of ADA falling to $0.50 or lower in the short term, holders face a difficult choice. Here are some strategic options to consider:
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Hodl with Caution: Long-term believers in Cardano’s roadmap may choose to ride out the volatility, especially if staking ADA for passive income.
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Set Stop Losses: Traders with short- to mid-term horizons should consider placing tight stop-losses below $0.58 to avoid significant losses if the price nosedives.
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Re-enter at Support: Investors may want to wait for ADA to reach the $0.50 zone or even lower before accumulating, especially if bullish reversal signs appear.
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Watch On-Chain Data: Keeping an eye on whale movement, exchange inflows, and development activity can help gauge sentiment shifts and potential trend reversals.
Final Thoughts
While Cardano remains a strong contender in the smart contract and blockchain infrastructure space, short-term price action suggests a bearish correction is underway. The confluence of technical resistance, liquidity zone rejections, and dormant wallet awakening makes a crash to $0.50 increasingly likely.
Investors are advised to manage risk carefully and prepare for a volatile few weeks ahead in ADA’s market trajectory.
