Cardano (ADA) has been on a remarkable run, with its price rising 300% in five weeks. The altcoin recently surpassed the $1 mark, reaching its highest value in nearly two years.
While this momentum has generated optimism among investors, it has also led to profit-taking, with many seeing current levels as an opportunity to sell.
Investors focus on profits
Small ADA holders have been actively selling their coins in recent weeks. Data indicates that wallets holding between 100 and 10,000 ADA have offloaded over 72 million tokens, worth over $92 million. This selling trend has persisted for over a month, highlighting profit-taking among retail investors.
While the volume of sales by small holders is significant, it is not as impactful as the larger transactions made by whales.
Despite the large volume of ADA being sold by these small holders, the market did not see a drastic price drop. However, this selling activity could signal caution among investors, with some opting to lock in gains rather than risk holding the altcoin amid potential market volatility.
This profit-taking trend by investors, while not enough to trigger a major sell-off, could add selling pressure to the price.
Cardano investor positions. Source: Santiment
The overall macro momentum is a bit more complex. The DAA Price Divergence indicator shows that while the price of ADA is rising, market share is not increasing at the same rate. This divergence is often seen as a bearish signal, as it suggests that the rally may be driven more by speculative buying than organic interest and sustained inflows.
The lack of increased participation, especially from larger investors, raises concerns about the sustainability of current price levels. If the divergence continues, it could induce a correction in price, as larger investors may be less inclined to continue buying at the high. This stagnation in market participation could lead to a reduction in price momentum in the coming weeks.
Cardano DAA Price Divergence. Source: Santiment
Cardano Price Prediction
Cardano has surged 25% this week to $1.29, taking the altcoin to its highest level in nearly two years.
The current momentum is significant as the asset approaches crucial resistance levels. Many are watching to see if this rally can be sustained, especially with the psychological threshold of $1.30 in play.
For the price to maintain its upward trajectory, it needs to flip the $1.30 resistance into support. If it can hold above this level, the rally could continue. However, a failure to do so could lead to a pullback towards the $1.01 support, erasing recent gains and potentially signaling the end of the bullish momentum.
Cardano Price Analysis. Source: TradingView
If Cardano can hold $1.30 as support, the next target could be $1.50. A move above this level would further strengthen the bullish outlook, confirming that the current rally has support. Such a scenario would invalidate the bearish thesis and signal continued growth, making $1.50 the next important resistance level.
The article Investors Sell Cardano (ADA) Again – Is Uptrend Threatened? appeared first on BeInCrypto.
