Cardano (ADA) price has seen a sharp increase recently, pushing the altcoin to a seven-month high.
However, maintaining these gains may be challenging as market conditions suggest a possible shift in investor sentiment.
Cardano investors pose a threat
Short-term investors have dominated Cardano’s market activity over the past two weeks. These holders typically hold their assets for less than a month and are more likely to sell during periods of volatility. Their ADA holdings have risen from 14% to 18%, suggesting that selling pressure could emerge soon. The increase in short-term activity could challenge ADA’s ability to maintain current levels, especially if profit-taking gains momentum.
While short-term investor activity has increased, the overall market remains optimistic, balancing the risk of a potential sell-off. However, the increase in short-term dominance highlights a fragile situation that needs to be closely monitored as it could signal that the market has peaked.
Cardano is currently undergoing a macro-level shift with its EMAs forming a golden crossover – a bullish indicator. The 50-day EMA crossing the 200-day EMA marked the end of a six-month death cross. This is Cardano’s first golden cross in 12 months and signals a possible long-term uptrend for the cryptocurrency.
Historically, this “golden cross” has typically been associated with significant price increases. However, whether ADA can build on this momentum will depend on broader market conditions, and whether the recent rally can withstand changes in investor behavior.
ADA Price Prediction: Gaining Support
Cardano’s price is facing mixed signals, trading at $0.59 at the time of writing. While broader market signals remain bullish, short-term investor activity is raising concerns about potential selling pressure.
If the bullish momentum continues, ADA could climb to $0.62. A breakout above this level could pave the way for Cardano to reach its target of $0.66, further solidifying its position in the market.
Conversely, failure to sustain above $0.59 could result in a drop of ADA to $0.54. A further break below this level would invalidate the bullish outlook and could drop the altcoin to $0.51, posing a significant risk to its recovery.
