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Cardano (ADA) has recently experienced a significant downturn, with its price dropping 15% in just one week, amidst escalating bearish momentum.
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Recent data indicates that whale activity has cooled off, with large holders decreasing their positions, adding short-term selling pressure to ADA.
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According to COINOTAG, ADA risks a potential 46% correction to $0.519 if the crucial support at $0.95 fails, while resistance at $1.03 could trigger a price recovery.
Cardano (ADA) has fallen 15% this week and faces significant selling pressure from whales, raising concerns of a potential 46% price correction.
Cardano’s Downtrend Intensifies
The Average Directional Index (ADX) for Cardano is currently recorded at 19.96, a notable increase from just 11 a day prior. This rise in the ADX suggests that the downtrend is gaining strength. As ADA struggles to maintain its bullish trajectory, the recent increase in ADX points toward a potential intensification of bearish momentum.
As ADA’s downtrend strengthens, the selling pressure could further escalate, particularly if the buying interest remains subdued. Short-term traders need to keep a close watch on market signals to navigate the next phases effectively.
The ADX is a crucial metric in determining the strength of price trends in any financial market. Values above 25 typically indicate a strong trend, while values below 20 suggest a weak market. ADA’s position nearing the threshold indicates that the current bearish market could soon see increased volatility, underscoring the importance of vigilant monitoring by investors.
ADA Whale Activity Shows Exit Signs
Recent statistics reveal the number of ADA addresses holding between 10 million to 100 million tokens has decreased from 409 to 407 within just five days. This decline indicates a withdrawal of large holders, or whales, which often plays a significant role in the market dynamics of cryptocurrencies.
The trend suggests that substantial holders may be offloading their assets, possibly reflecting diminished confidence or a strategic move to take profits amidst the bearish market conditions.
Monitoring whale transactions is vital as they can significantly influence market trends and price movements. The uptick observed from December 10 to 14, where the number of whale accounts rose from 400 to 409, indicated a period of accumulation. However, the recent decrease suggests a reversal, potentially leading to further downward pressure on ADA unless new buying momentum emerges.
Evaluating Potential Cardano Price Movements
Technical indicators, such as the Exponential Moving Averages (EMA), point towards the possibility of a deeper correction. Currently, the short-term EMAs are all trending downward, and a potential crossover below the longer-term EMA could signal a death cross. This pattern is generally interpreted as a bearish signal, indicating sustained downward movement might continue.
Should the price of ADA drop below the immediate support level of $0.95, it could easily slide further to around $0.65 or even $0.519, marking a steep potential decline of 46%.
Conversely, if buying pressure significantly increases, Cardano could attempt to break through the resistance at $1.03. Successfully surpassing this level may unlock further upside potential for ADA, with upcoming targets set at $1.18 and potentially $1.24.
Conclusion
In summary, Cardano faces mounting bearish pressures, with significant selling from whales and key support levels in jeopardy. Short-term traders should prepare for possible scenarios, either a concerning dip or a recovery, as market dynamics continue to evolve. The next critical days will be telling for ADA’s price trajectory.
