Cardano at Vital Support While Whales Accumulate
Cardano is trading on shaky grounds despite a recent increase in buying pressure.
- Cardano has retraced by more than 40% over the past month.
- ADA is now sitting on top of vital support at around $0.75.
- Meanwhile, whales appear to have entered a buying spree.
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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 obstacles it must overcome to avoid a steeper correction.
Cardano Sits on Vital Support
Whales are accumulating ADA, but the Layer 1 asset is still at risk of a correction.
ADA has plummeted by more than 40% over the past month. It dropped from a high of $1.25 on Apr. 4 to a low of $0.73 on Apr. 30. The significant downtrend has pushed Cardano below a critical area of support, which could mean further losses are on the horizon.
The formation of a parallel channel on the daily chart suggests that Cardano could drop 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.
It is worth noting that the buying pressure behind Cardano has increased over the past few weeks despite the ongoing downtrend.
On-chain data from Santiment shows that the number of addresses holding more than 10 million ADA has surged by 2.14% since Apr. 17. Roughly ten whales have joined the network within this period.
Each of these addresses has accumulated more than $8 million worth of ADA, which may help the price stay above $0.75. But to invalidate the bearish thesis, Cardano would have to reclaim $0.83 as support. Under such unique circumstances, it will have a good chance of rebounding to $1.
Disclosure: At the time of writing, the author of this piece owned BTC and ETH.
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