Cardano reclaims 2-month range after breakdown: Should you buy this bounce?

Cardano's range formation and long-term downtrend were central to the expected short-term price trends

Last weekend, Cardano [ADA] breached the lows it established in the first week of February. Since this breach, the price has bounced nearly 6% from the $0.234 local lows and was trading within the two-month range once again.

Recently, Cointalk reported that Cardano whales accumulated 220 million ADA over a week. Their total holdings measured 13.84 billion across large wallets and reflected deliberate absorption.

Moreover, top traders maintain a long bias despite the recent volatility. Did this mean that the weekend ADA price drop was a liquidity sweep – a deliberate move to shake out weak hands before reversing?

Examining Cardano's longer-term trend

Cardano has been forming lower lows and lower highs since October 2025. These are characteristic of a downtrend, and the Directional Movement Index (DMI) agreed. However, this indicator has been indecisive over the past three weeks.

The range formation between $0.245 and $0.30 since February has led to the DMI showing no strong trend. At the same time, the OBV (On-Balance Volume) was also within a range, exhibiting a balance between aggressive buyers and sellers.

The moving averages came closer and closer, but no bullish crossover was seen. This agreed with the range formation – there was no significant momentum, and a price move above the moving averages can get undone quickly.

What this tells us:

• The downtrend from October 2025 remains intact
• The February–April range ($0.245–$0.30) is still the dominant structure
• Neither buyers nor sellers have shown decisive strength

Traders' call to action – Stay bearish

Despite the whale accumulation, the swing trader bias should remain bearish. This was because of the price structure on the 4-hour chart. Moreover, the higher timeframe also showed seller prevalence.

The $0.233 and $0.278 levels (key swing points on this timeframe) are what traders should keep an eye on.

The trade setup:

• A bounce to $0.26–$0.27 would present a selling opportunity targeting the $0.233 lows
• Until the $0.278 swing level is breached, the bias can remain bearish
• Beneath $0.233, the next southward targets would be $0.222 and $0.205
• Such a drop would confirm the breakdown from the range

Why whales are buying while the bias is bearish

This is the key contradiction in ADA right now: whales accumulated 220M ADA, yet price structure says "stay bearish." How can both be true?

Possible explanations:

1. Whales are averaging in – Large holders may be accumulating gradually over weeks or months, not expecting an immediate bounce. They can absorb price drops that would shake out smaller traders.

2. The accumulation is strategic, not predictive – Whales may be positioning for a catalyst (e.g., network upgrade, regulatory clarity) that hasn't arrived yet. Until then, price follows technicals.

3. Liquidity sweep confirmed – The weekend drop below $0.234 and quick recovery to $0.245+ suggests the move was designed to trigger stop losses and catch shorts off guard. Whales may have bought the dip.

4. Divergence between spot and derivatives – Whale accumulation shows up in on-chain/wallet data. But derivatives positioning (funding rates, OI) still favors bears. The conflict will resolve with a sharp move.

Two scenarios for ADA

Scenario A: Bearish continuation (higher probability)

Scenario B: Bullish reversal (lower probability, higher reward)

Key indicators to watch

What traders should do right now

For swing traders (bearish bias until proven otherwise):

• Look for a bounce to $0.26–$0.27 as a potential short entry
• Place stop loss above $0.278
• Target $0.233, then $0.222
• Do not short below $0.24 – risk of liquidity sweep reversal

For position traders (longer-term):

• Wait for confirmation: either a daily close above $0.278 (bullish) or below $0.233 (bearish)
• Whale accumulation suggests smart money is interested, but technicals say wait
• Accumulation does not mean immediate upside – patience required

For everyone:

• Treat the current bounce as a relief rally within a downtrend until proven otherwise
• The $0.278 level is the line in the sand for bullish reversal
• Until then, "sell the bounce" remains the higher-probability trade

Final summary

• Cardano sank below the lows of the range from February but quickly bounced back within the range.
• As things stand, the bears have the upper hand , and more downside remains likely for ADA until $0.278 is reclaimed.

Note: This analysis is for informational and educational purposes only and does not constitute financial advice. Cryptocurrency markets are highly volatile. Always do your own research before trading. The "sell the bounce" strategy carries risk if the market reverses sharply.