Cardano (ADA) has seen a significant rally recently, pushing its price to a seven-month high.
However, maintaining these gains can be challenging as market conditions indicate a possible shift in investor sentiment.
Investors pose a threat to ADA
Over the past two weeks, short-term investors have dominated Cardano’s market activity. These holders, who typically hold assets for less than a month, are more likely to sell during periods of volatility.
These investors’ stake in ADA has risen from 14% to 18%, suggesting that selling pressure could emerge soon. This increase in short-term activity could challenge the asset’s ability to maintain its current levels, especially if profit-taking gains momentum.
While short-term investor activity increases, the broader market remains bullish, balancing potential sell-off risks. However, the growing short-term dominance highlights a fragile situation that requires monitoring as it could signal a market top.
Cardano Supply Distribution. Source: IntoTheBlock
Furthermore, the altcoin is undergoing a macro-level shift, with its EMAs forming a golden crossover. This golden crossover, where the 50-period EMA crosses above the 200-period EMA, was the first in 12 months, which signals a possible long-term uptrend.
Historically, such crossovers have been associated with significant price growth. However, ADA’s ability to capitalize on this momentum will depend on broader market conditions and whether the recent rally can withstand changes in investor behavior.
Cardano’s Golden Cross. Source: TradingView
Read more: How to Buy Cardano (ADA) and Everything You Need to Know
Price prediction
Cardano is currently facing mixed signals, trading at $0.58 at press time. While overall market signals remain bullish, short-term investor activity raises concerns about potential selling pressure.
If the bullish momentum continues, the cryptocurrency’s price could rise to $0.62. Breaking this level could pave the way for $0.66, further consolidating its position in the market.
Cardano Price Analysis. Source: TradingView
On the other hand, if it fails to hold above $0.59, ADA could drop to $0.54. Any further decline below this level would invalidate the bullish outlook and could take the altcoin to $0.51, posing significant risks to its recovery.
The article Cardano (ADA) ends decline and price may consolidate, according to analysis was seen for the first time on BeInCrypto Brazil.
