Cardano Reaching Critical Support, Whales Have Been Accumulating
Regardless of Cardano (ADA) dropping to a record low level along with the wider crypto market earlier this year, ADA whales seem to believe in the future price of the crypto asset.
Cardano has reached a critical support area after incurring significant losses over the past month. Although buying pressure appears to be increasing, there are a few things ADA must overcome in order to avoid a steeper correction.
ADA Performance
ADA has fallen over 40% in the past month. It dropped from a high of $1.25 on April 4 to a low of $0.73 on April 30. The downtrend has pushed Cardano below a critical area of support, which could mean that it’s not over yet.
The formation of a parallel channel on the daily chart suggests that Cardano could fall down to the lower boundary of this technical formation at $0.60 now that it has breached the middle trendline. A sustained daily candlestick close below $0.75 could serve as confirmation of the pessimistic outlook.
Source: Cryptobriefing / tradingview
Whales Are Accumulating ADA
However, the buying pressure behind ADA has increased over the past few weeks despite the ongoing downtrend.
According to on-chain data from Santiment, Cardano whale addresses holding 1 million to 10 million ADA have been heavily accumulating over the past five weeks despite its price hovering near 15-month low levels. Altogether, this cohort of investors has added almost 200 million ADA into their bags.
?? #Cardano whale addresses holding 1M to 10M $ADA are accumulating their bags these past 5 weeks (196M more $ADA) after a 7-month stretch of dumping (-1.7M less $ADA). The 9th largest market cap asset recently hit prices last this low in February, 2021. https://t.co/co8BcqHJAFpic.twitter.com/OXpbu3KSXp
The change in whale sentiment comes after months of dumping ADA tokens which drove the price of the ninth-largest cryptocurrency down by 75% since its peak in September 2021 to a February low. A spike in buying pressure could essentially mean that the whales are eyeing potential recovery in the near term. This demand barrier could act as a formidable support floor at $0.8.
Cardano picked up significant network activity in the first quarter of the year. Large transaction volume (LTV) on the blockchain suggested a rise in institutional demand.
