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Recent whale activity involving 130 million ADA signals interest in Cardano, yet market indicators suggest a cautious outlook for price recovery.
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Despite this surge in whale purchases, bearish trends in liquidity and investor sentiment indicate potential challenges ahead for ADA’s price.
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According to COINOTAG, a prominent crypto analysis platform, “The recent influx of whale purchases does not guarantee an immediate price rebound for ADA as several key metrics remain bearish.”
Whales have purchased 130 million ADA, but bearish trends in Cardano’s market indicators cast doubt on potential short-term price recovery.
Cardano price action analysis: Key levels to watch
Cardano’s recent price action has demonstrated a bearish trend, with ADA breaking below critical support levels in the last few weeks. This has resulted in the price stabilizing within a symmetrical triangle pattern, indicating a potential increase in volatility.
Currently, ADA is trading just above the $0.5928 level, identified as crucial support.
Should ADA fail to maintain this support, it may decline towards the $0.5793 mark, while upside resistance is anticipated at $0.6793 with a significant resistance point noted at $0.9907.
Source: TradingView
Cardano daily active addresses: A worrying decline
Recent metrics reveal Cardano’s daily active addresses have plunged to just 24,407, a stark contrast to previous highs recorded in late 2024.
Although substantial ADA purchases have been made by whales, insufficient participation from retail investors signals diminishing interest in Cardano which might limit any upward price movement in the short term.
Source: Santiment
ADA MVRV ratio: Negative market sentiment
Cardano’s MVRV ratio has recently dropped to -6.05%, which reflects a significant undervaluation relative to its historical performance. This negative trend implies that many investors who purchased ADA at higher prices are now facing losses.
Consequently, this situation can lead to a reduction in buyer activity within the market, further complicating potential upward price movements.
The ongoing negative MVRV also indicates prevailing bearish sentiment, discouraging investors from taking risks with ADA at these current price levels.
Source: Santiment
ADA liquidation heatmap: Increasing liquidation pressure
The liquidation heatmap reveals a critical concentration of liquidations significantly below the $0.60 mark. This data signifies that many leveraged traders face risks should the price continue to decline.
As Cardano’s value decreases, there is a heightened potential for cascading liquidations, which could amplify the downward pressure on the price. Traders are advised to exercise caution as the liquidation pressure might exacerbate declines if crucial support levels cannot be sustained.
Source: Coinglasss
Will whale activity trigger a price rally?
Even with the notable surge in whale activity, several adverse factors remain, including a drop in daily active addresses, a negative MVRV ratio, and increasing liquidation pressures.
These elements collectively suggest that Cardano is ensconced in a bearish phase, and the recent uptick in whale purchases may not suffice to alter the prevailing trend.
In summary, without a shift in overall market sentiment, ADA is poised to struggle for any significant rally in the near future.
