- Cardano (ADA) has been struggling to reclaim the $0.5 level as a support zone.
- On-chain metrics suggest network-wide accumulation, but whale activity remains subdued compared to previous rallies.
- According to the liquidation heatmap, the $0.5 level is a significant zone of liquidity.
Cardano’s uphill battle at $0.5: Will ADA break through?
Cardano Faces Resistance at $0.5
Cardano (ADA) has been attempting to break past the $0.5 resistance level. This zone has proven to be a significant psychological barrier, as evidenced by the price action in recent months. On April 24th, ADA failed to convert this level into support, leading to a sharp decline. Similarly, a brief rally above $0.5 on May 20th was short-lived, with prices falling back to $0.482 at the time of writing.
On-Chain Metrics and Whale Activity
Despite the overall network accumulation, whale activity has been less aggressive compared to the 2020 rally. Data shows that wallets holding between 1k and 100k ADA have decreased since November 30, 2023. Meanwhile, wallets with 10M to 100M ADA experienced a downturn in January 2023 but have been gradually increasing in 2024. However, this growth is still modest compared to the previous bull run, indicating that large holders are not yet fully committed to accumulating ADA.
Social Metrics and Market Sentiment
Social metrics for Cardano have also been underwhelming. The social volume has been trending downward for over two months, and the weighted sentiment has remained negative since March. This lack of positive sentiment could be a contributing factor to ADA’s struggle to break past the $0.5 resistance level.
Liquidation Levels and Market Dynamics
The liquidation heatmap reveals that the $0.5 level is a crucial zone of liquidity. Recent price action saw this level being swept, followed by a rejection, indicating potential consolidation around $0.477 before another attempt to rally to $0.525. This consolidation phase could allow for more short positions to build up, increasing the available liquidity overhead.
Further analysis of the liquidation levels shows that short and long positions are relatively balanced in the near term. The recent pullback from $0.51 has wiped out late long entrants, making more long positions vulnerable than shorts. The next downside targets are clustered around $0.479 (high leverage), $0.475 (medium leverage), and $0.466 (low leverage).
Conclusion
Cardano’s struggle to reclaim the $0.5 level as support highlights the current market dynamics and sentiment. While on-chain metrics suggest network-wide accumulation, whale activity and social sentiment remain subdued. The liquidation heatmap indicates that consolidation around $0.477 could precede another rally attempt. Investors should keep an eye on these key levels and market indicators to gauge ADA’s future price action.
