Cardano (ADA) has enjoyed a strong run in 2024, climbing nearly 60% since late January. However, its recent momentum appears to be fading, raising concerns about the sustainability of the rally. Here’s a closer look at the factors potentially hindering further ADA price increases.
Stalling at Resistance, Shifting Hands
Cardano is struggling to break through a critical resistance level of $0.76. This failed breakout attempt could dampen investor confidence. Additionally, the supply distribution of ADA seems to be shifting towards short-term holders (those holding less than a month). Their holdings have surged by 12.9%, reaching 18.4% in the past month. These traders are known for their rapid buying and selling, potentially increasing price volatility for ADA.
Large investors, or “whales,” who hold less than 9% of Cardano’s circulating supply, are responsible for a whopping 90% of on-chain transactions. Over the past week, a significant increase in whale transactions (reaching $25 billion out of a total $30 billion) has been observed. This could indicate whales taking profits before a potential price decline.
Also Read: Cardano (ADA) Swims Against the Tide: Why is it Facing Losses While the Market Rallies?
Price Prediction: A Balancing Act
Technical indicators suggest a potential ADA price drop. The inability to breach the $0.74 resistance could see ADA retreat to $0.68 or even test the $0.63 support level. However, a glimmer of hope remains. The Relative Strength Index (RSI) sits in the bullish-neutral zone, indicating that ADA still has room for recovery as long as it stays above the 50.0 neutral line. A decisive break above $0.74 and a flip of $0.76 into support would invalidate the bearish sentiment.
The Verdict: Uncertain Future for ADA
Cardano’s current situation is a balancing act. While short-term holder concentration and whale activity raise concerns, the RSI offers a ray of hope. Whether ADA can overcome these bearish signals and resume its rally depends on its ability to climb past the $0.74 resistance level. Investors should closely monitor price movements and technical indicators to make informed decisions.
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