The Cardano price is still up nearly 12% over the past 24 hours, holding near $0.29 after rebounding from its recent lows. On the surface, this looks like the start of a larger recovery. The price even attempted a breakout that projected a roughly 38% rally toward $0.41. But that breakout has failed so far.

The rejection was not sudden. It happened despite massive whale buying worth about $340 million. The real story is deeper. Multiple hidden forces, including conflicting whale activity and liquidation risk, quietly blocked the rally.

Bullish Divergence And Breakout Setup Initially Pointed To A 38% Rally

The recovery setup began forming weeks earlier. Between January 31 and February 24, the Cardano price formed a lower low. This means the price dropped to a new bottom compared to the previous swing. Normally, that signals weakness. But at the same time, the Relative Strength Index (RSI) formed a higher low.

RSI is a momentum indicator that measures buying and selling strength. When RSI rises while price falls, it creates a bullish divergence, a reversal cue. This usually signals that selling pressure is weakening, even as the price continues to decline.

This exact pattern appeared within an inverse head-and-shoulders structure, a classic bullish reversal pattern. When Cardano approached the neckline level on February 25, it appeared ready to break out. The projected upside from this pattern was about 38%.

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But instead of breaking cleanly, Cardano formed a long upper wick and fell back. This long wick shows sellers entered aggressively and absorbed the buying pressure before the breakout could be confirmed. At this point, the breakout failed.

The failed breakout did not happen without warning. Right after the rejection on February 25, another dangerous signal appeared on the chart — a hidden bearish divergence.

Between January 21 and February 25, the Cardano price formed a lower high. This means the recent peak was still weaker than the previous rally peak. But during the same period, the Relative Strength Index (RSI) formed a much higher high.

This is called a hidden bearish divergence. It happens when momentum rises faster than price, but price still fails to break key resistance. This usually signals that the rally is running out of strength and that sellers are preparing to regain control.

The timing makes this signal even more important. The divergence as Cardano printed the long upper wick on February 25 and failed to break above $0.31.

This confirms that the breakout rejection was not just random profit-taking. It was a structural rejection backed by weakening price strength beneath rising momentum. Hidden bearish divergences often lead to pullbacks. That pullback now appears to have already started, with Cardano slipping back below its breakout level.

This creates a risky situation. The bullish breakout structure is still technically alive, but only if the pullback remains limited. A deeper decline would confirm that sellers have fully regained control.

$340 Million Whale Buying Happened — But Larger Whales Quietly Sold Much More

At first glance, whale data looked extremely bullish. Wallets holding between 100 million and 1 billion ADA increased their holdings from 2.33 billion ADA to 3.47 billion ADA. This means they bought 1.14 billion ADA, worth about $340 million. This is the buying activity most traders possibly saw.

But this was only part of the picture. Other whale groups were selling heavily at the same time. The largest whales, holding over 1 billion ADA, reduced their holdings from 2.89 billion to 1.88 billion ADA. This equals 1.01 billion ADA sold, worth about $297 million.

Mid-size whales holding 10 million to 100 million ADA sold 70 million ADA, worth about $21 million. Smaller whales holding 1 million to 10 million ADA sold 3.41 billion ADA, worth about $1.0 billion.

In total, selling reached about $1.32 billion. Compare this to the $340 million bought. That creates a net whale selling imbalance of roughly $980 million.

This explains the failure, including the long upper wick. The visible whale buying created optimism, but the larger, hidden whale selling completely overwhelmed it. This silent distribution blocked the breakout.

Derivatives Traders Took The Bait — Now Liquidation Risk Is Rising

Derivatives traders reacted exactly as expected. They saw a breakout forming, so they opened long positions expecting the rally to continue.

Liquidation data, on Binance alone, shows $11.40 million in long liquidations sitting below current price levels, while short liquidations are only $5.67 million. This means bullish traders are far more exposed to downside risk.

If the Cardano price falls, long positions will be forced to close. This creates a long squeeze. A long squeeze happens when falling prices force bullish traders to exit, and their forced selling pushes the price even lower. This is how failed breakouts often accelerate into deeper corrections.

Cardano Price Now Faces A Critical Breakdown Risk Toward $0.22

The ADA price structure now sits at a critical point. For the bullish breakout to remain valid, Cardano must reclaim and hold above $0.30. This would restart the path toward the $0.41 target.

But downside risks are growing. If Cardano falls below $0.27, the pullback strengthens. If it falls below $0.25, the bullish structure becomes invalid. This level is especially dangerous because it aligns with heavy, long liquidation exposure.

A break below $0.25 could trigger cascading liquidations, which could likely push the price toward $0.22, the full pattern breakdown possibility.

Right now, Cardano’s failed breakout (at press time) is not just a technical rejection. It is the result of nearly $1 billion in hidden whale selling. This imbalance is quietly turning into a high-probability breakout into a trap, and until buying fully outweighs selling, the recovery remains wishful.