- As of writing, Cardano is currently ranging between the $0.63 and $0.65 marks after recovering 10% from its low of $0.55 on 8 April.
- The sentiment on Cardano is still mixed, especially after large holders recently offloaded over 100 million ADA tokens, worth around $65 million.
- Unless Cardano can reclaim the 20-day EMA and push the RSI into more bullish territory, the bullish hopes for a push toward $1 might not take hold.
ADA is facing one of the biggest hurdles in recent times, especially concerning its future in the short term. While the token’s performance has been relatively modest recently, the sentiment across the market is still mixed, especially after large holders recently offloaded over 100 million ADA tokens, worth around $65 million. Can Cardano still surge in the short term, or is it heading for another crash?
ADA’s Recent Price Movement
As of writing, Cardano is currently ranging between the $0.63 and $0.65 marks after recovering 10% from its low of $0.55 on 8 April. This move to the upside followed a wider market rebound, but the gains have been less than consistent.
The last 30 days have seen Cardano crash by nearly 13%, which is relatively modest compared to most of the other cryptocurrencies but is still a crash, nonetheless. Despite this relatively stable performance, many traders are still hesitant. This cautious optimism comes from technical patterns that show a possible breakout could be incoming.
Whale Dumping Triggers Alarm Bells
The most concerning development for Cardano holders is the ongoing sell-off by large wallet holders. According to on-chain analytics highlighted by Ali Martinez on Twitter (now X), whales, or wallets holding between 1 million and 10 million ADA tokens, dumped as many as 100 million ADA in just one week. This is equivalent to around $65 million being dumped on the market.
From a historical perspective, prices tend to rally when the whales accumulate, and the opposite tends to happen when they sell. The recent dump, therefore, shows a major shift in sentiment among Cardano’s biggest investors. The whales in question are either taking profit on Cardano’s recent recovery from last week or have lost confidence altogether.
Technical Indicators Flash Mixed Signals
The technical outlook for Cardano is complex from any standpoint. For starters, the token is gearing up for a breakout from the falling wedge pattern illustrated below. However, Cardano continues to trade underneath its 50-day EMA, which often controls the general market trend. Cardano’s position underneath this EMA shows that bearish sentiment is still in control, and the bulls must approach with caution.
In addition to this, the RSI on the daily chart currently trades underneath the 50/100 mark. This, when combined with the 50-day moving average, indicates that the bears are still in control, and Cardano lacks the buying pressure to sustain another rally to the upside. This means that unless Cardano can reclaim the 20-day EMA and push the RSI into more bullish territory, the bullish hopes might not take hold.
Overall, the most important support level for Cardano bulls to defend is the $0.63 price level. A break below this price level could trigger a deeper correction towards $0.54. On the other hand, major resistance sits at around $0.70 to $0.73, and a break above could open the door towards $1.
