|
Getting your Trinity Audio player ready...
|
Cardano [ADA] is experiencing a notable shift in market sentiment, flashing decisively bullish signals that are being echoed by both crowd indicators and “smart money” metrics. According to recent data, the crowd sentiment score stands at a healthy 1.24, while the smart money indicator registers an even stronger 1.99, suggesting growing confidence among sophisticated investors.
Despite a minor 1.83% dip in the last 24 hours, which saw ADA trade at $0.6846 at press time, the underlying technical structure and on-chain activity paint a promising picture for potential upward movement. This minor pullback appears to be occurring within a broader context of increasing conviction and strategic accumulation.
Technical Structure Reinforces Potential Price Recovery
Technically, Cardano has demonstrated resilience by reclaiming both its 9-day and 21-day Moving Averages (MAs), currently positioned at $0.6434 and $0.6301, respectively. These moving averages are now acting as dynamic support levels, providing a foundation for a potential price recovery. Further bolstering this bullish outlook, the Parabolic SAR indicator has flipped below the price, registering at $0.6153, signaling continued upward momentum.
However, a crucial hurdle remains in the form of the $0.7626 resistance level. This zone has historically capped several bullish attempts in recent months. A decisive breakout above this resistance, particularly accompanied by strong trading volume, could pave the way for a significant move towards the $1.20 mark – a key psychological level that is likely to attract further investor interest and trading activity.
Exchange Outflows and Rising Retail Activity Underpin Accumulation Narrative
On-chain data further strengthens the bullish case for Cardano. Recent spot exchange flow analysis reveals a net outflow of $16.44 million in ADA, compared to inflows of $13.41 million. This significant withdrawal suggests that holders are increasingly moving their tokens off exchanges, likely into long-term storage or decentralized finance (DeFi) protocols. This behavior is typically indicative of accumulation rather than immediate selling pressure.
Interestingly, while the Total Value Locked (TVL) in Cardano’s DeFi ecosystem experienced a minor 2% dip in the last 24 hours, this slight decrease does not suggest panic selling, especially when viewed in conjunction with the consistent exchange outflows and the prevailing positive sentiment. Furthermore, transaction activity reveals a surge of 250% in transactions below the $1 threshold, indicating growing participation from retail investors and dApp users. Although higher-value transactions have seen a decline, the increasing grassroots engagement suggests a broadening base of demand.
Shifting Investor Composition Hints at Long-Term Conviction
An examination of Cardano’s investor composition reveals a noteworthy shift in market dynamics. Over the past month, whale holdings have decreased by 1.68%, while the participation of long-term investors has increased by 1.60%. Additionally, retail addresses have seen a 0.72% uptick. This redistribution of ADA into the hands of smaller, more committed investors suggests a strengthening foundation for sustained growth.
While the apparent reduction in whale exposure might raise some eyebrows, the concurrent increase in long-term investor and retail participation could provide a more stable and resilient base for future price appreciation. With bullish sentiment gaining traction, solid technical indicators in play, consistent exchange outflows, and rising retail engagement, Cardano appears well-positioned to reclaim the $0.70 level and potentially test higher resistance in the near term, suggesting a broader upward trend may be on the horizon.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
Also Read: Cardano (ADA) Bull Run Begins? Price Jumps on Retail Buying Spree After Triangle
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
