Cardano’s Governance Milestone Amidst Divergent Investor Behavior

While Cardano (ADA) has not captured headlines with dramatic price movements recently, a significant development in its governance framework is poised to shape the project's long-term trajectory. This evolution coincides with a notable market dichotomy: retail investors are largely retreating, while major holders are accumulating substantial positions. This analysis explores the implications of this split for ADA's market dynamics.

On-chain data reveals a stark divergence in investor behavior. Spot trading volume on decentralized exchanges has plummeted by over 95% since its peak on January 6th, when both price and DEX volume hit annual highs. This sharp decline strongly suggests a cooling of typical retail demand.

In contrast, large ADA holders, often referred to as "whales," have been actively buying:

• Addresses holding over 1 billion ADA increased their holdings from 1.92 billion to 2.93 billion ADA, a purchase of approximately 1.01 billion ADA. At current prices, this represents an inflow of roughly $360–380 million.
• Mid-tier whales (10–100 million ADA) began accumulating on January 17th, adding around 30 million ADA (worth about $11 million).
• Addresses with 1–10 million ADA have collectively accumulated over 210 million additional tokens in the past three weeks.

The timing is noteworthy. This accumulation began after a clear downtrend was established, spot interest had collapsed, and the market structure appeared bearish. Furthermore, coins held for 180 to 365 days have largely stopped moving. Spending activity from this cohort fell from 67.47 million ADA on January 14th to just 174,000 ADA recently—a drop exceeding 99%—indicating strong conviction among long-term holders.

Ratified Constitution Sets New Governance Course

This week, Cardano's community ratified a revised constitution, with 79% of the actively voting stake, represented by Delegated Representatives (DReps), approving the measure. The new constitution is scheduled to take effect at the epoch boundary on January 24, 2026, aiming to create clearer and more resilient decision-making structures.

The updated framework includes:
* Refined principles for on-chain governance
* More clearly defined roles and responsibilities for governance participants
* Updated constraints on potential governance actions
* An adjusted mandate for the Constitutional Committee

From a market perspective, this ratification signals Cardano's continued professionalization of its governance model—a factor of particular importance to long-term, institutionally-minded investors.

Technical Picture: Key Support Zone Under Pressure

ADA is currently testing a critical support area. Trading near $0.36, the price sits just above its 52-week low of $0.33 and remains approximately 59% below its 12-month high of $0.87. The asset is also trading about 7% below its 50-day moving average and well under its 100-day average of $0.46. A 14-day Relative Strength Index (RSI) reading of 32.5 indicates an environment nearing oversold conditions, typical of an advanced correction phase.

Analysts identify a current trading range between major support at $0.33–$0.34 and a resistance band around $0.40–$0.42. Several technical indicators are providing tentative positive signals:
* A potential inverse head-and-shoulders pattern below a descending trendline
* A weekly MACD showing early signs of potential bottom formation
* An RSI near oversold territory
* A rising Money Flow Index (MFI) while price consolidates near lows
* A positive Chaikin Money Flow (CMF) despite weak price action

Key upside levels to watch are $0.37, $0.39, and the $0.42–$0.43 zone. On the downside, $0.35 is viewed as critical near-term support. A break below the $0.33–$0.34 area would increase the risk of a decline toward $0.25.

Should investors sell immediately? Or is it worth buying Cardano?

Ecosystem Developments: Midnight and DeFi Infrastructure

Alongside governance upgrades, the Cardano ecosystem is advancing its technical infrastructure.

The Midnight Partnerchain

The privacy-focused partnerchain, Midnight, is pursuing a "rational privacy" model. It aims to allow users granular control over what information they share and with whom, while also addressing regulatory compliance.

Its roadmap outlines:
* Q1 2026: First dApps expected to go live
* Q2 2026: Network expansion
* Q3 2026: Integration with other blockchains and hybrid applications

This creates an additional layer atop Cardano's base system for applications requiring enhanced data protection and flexible disclosure.

DeFi Budget Proposal for Trading

In decentralized finance (DeFi), the "DeltaDeFi Budget Info Action" is drawing attention. This proposal requests 1,500,000 ADA to fund a Hydra-based trading infrastructure project. The goal is to build a production-ready, low-latency order book exchange focused on ADA and Cardano-native tokens.

The proposal is currently under community review, with the voting period closing on January 29th. It seeks to develop a technical foundation to make Cardano DeFi more competitive against existing high-performance decentralized exchanges.

Market Sentiment and Forward Outlook

Sentiment surrounding ADA is mixed. A Fear & Greed Index value of 44 reflects a neutral-to-slightly fearful environment. An analysis from January 18th showed technically bearish signals heavily outweighing bullish ones, at 86% versus 14%.

However, several factors counterbalance this short-term weakness: the ratified constitution and impending new governance rules, the progressing Midnight roadmap, and the targeted accumulation by large addresses amid plummeting sell pressure from long-term holders.

For the coming weeks, two levels are crucial. Technically, the focus is on whether ADA can defend the $0.33–$0.35 support zone and subsequently mount a move toward $0.40 and beyond. Fundamentally, the implementation of new governance rules, the launch of the first Midnight dApps in Q1, and the DeltaDeFi funding vote by January 29th will provide concrete evidence on whether the confidence demonstrated by major holders is warranted.