Despite a recent market correction, Cardano (ADA) has shown resilience, with its price structure indicating a positive outlook. The cryptocurrency market saw a downturn, yet ADA's long-term prospects appear strong. Evidence of increased whale accumulation and a noticeable decrease in selling pressure suggest a growing belief among investors that ADA is poised for an upward trajectory. This renewed confidence could propel its value towards the $0.86 mark, provided it successfully breaches key resistance levels.
Cardano Witnesses Whale Accumulation and Reduced Selling Pressure, Signaling Potential Price Surge to $0.86
In the aftermath of the October 12th market downturn, Cardano (ADA) has demonstrated a robust bullish setup, supported by significant on-chain metrics. Following a period of relative stability after the broader market's \"Black Friday\" crash, ADA's price, though initially affected more severely than other major cryptocurrencies, is now showing signs of a strong recovery within its multi-week bullish channel.
Key insights from Santiment reveal a surge in whale activity since October 12th. Wallets holding over 1 billion ADA tokens have substantially increased their holdings from 1.50 billion to 1.59 billion ADA. Concurrently, mid-tier whales, possessing between 10 million and 100 million ADA, expanded their balances from 13.18 billion to 13.29 billion ADA. This synchronized buying, totaling approximately 200 million ADA tokens worth around $140 million at an average price of $0.70, highlights a collective confidence in ADA's current price levels as a potential base.
Adding to this positive sentiment, the Spent Coins Age Band (SCAB) metric, which tracks the movement of ADA tokens across different age groups, has seen a sharp decline since October 12th. The volume of spent coins plummeted by 51%, from 179.06 million to 87.33 million ADA, indicating a significant reduction in overall on-chain selling pressure. This dual observation—increased accumulation by large holders and decreased selling activity—suggests a strengthening investor conviction and a diminishing supply of tokens entering the market.
From a technical analysis perspective, the 12-hour chart for Cardano reveals that its price continues to move within a well-defined ascending channel. After finding crucial support near the $0.61 level, which represents the lower boundary of this channel, ADA's price has rebounded towards $0.73. This level aligns with the 0.236 Fibonacci retracement. A decisive breakthrough and sustained close above $0.73 could pave the way for ADA to target the next significant resistance zone at $0.86. This $0.86 mark has historically acted as a rejection point for several past rallies, as evidenced by price clustering.
Successfully surmounting the $0.86 level would validate the next phase of ADA's price recovery, potentially pushing it towards $1.01 (the 0.786 Fibonacci level) and further to $1.12, which corresponds to the upper trend line of the channel. However, the bullish scenario remains contingent on ADA maintaining its position above the $0.61 support level. A failure to hold this support could lead to a more substantial decline, invalidating the current bullish structure and delaying any prospective recovery efforts.
The confluence of these on-chain and technical indicators paints an optimistic picture for Cardano. The synchronized movements of large holders and the reduction in selling pressure underscore a resilient market sentiment. For investors, this period presents a critical juncture, as ADA navigates key resistance levels that could dictate its short-to-medium term price action. The ability of ADA to sustain its upward momentum and break past the $0.73 and $0.86 barriers will be crucial in confirming its path towards higher valuation targets, reinforcing its position within the broader cryptocurrency ecosystem.