ADA has increased by 23.8% in the past week.
Cardano whales bought 40 million ADA Tokens in 48 hours.
After hitting a low of $0.878, Cardano [ADA] has shown strong growth to $1.119, an increase of 23.80% on the weekly chart.
Since then, this altcoin has experienced a slight correction on the daily chart. In fact, as of the time of writing, Cardano is trading at $1.106, corresponding to a 1.23% increase in the past day.
The recent price increase has drawn analysts' attention to the driving factors. According to renowned crypto analyst Ali Martinez, one driving factor for ADA's price is increasing buying pressure.
Cardano whales buy 40 million Tokens
In his analysis, Martinez observed that Cardano whales have entered a buying cycle. Accordingly, whales have purchased over 40 million ADA Tokens in the past 48 hours.
Source: X
When whales shift to buying an asset, it indicates their optimistic sentiment and confidence in the market.
Notably, this demand for ADA is not just a case for whales, as retail investors are also actively buying. Therefore, other market participants have been actively purchasing this altcoin since New Year's Eve.
This is evidenced by the sudden spike in the Relative Strength Index (RSI) rising from 39 to 62. When the RSI increases by that margin, it shows strong buying pressure, implying buyers are dominating the market.
What the ADA chart shows
With strong buying from both whales and retail investors, this indicates ADA has the strength to continue achieving larger gains.
According to TinTucBitcoin's analysis, Cardano is witnessing strong upward momentum amid increasing demand.
Source: Santiment
We can see increasing demand through the growing scarcity of Cardano. This is evidenced by the Stock to Flow ratio rising to 133.7.
As the SFR ratio rises, it implies that ADA is becoming scarce, with demand exceeding supply. Generally, higher demand helps push prices up.
Source: Coinglass
At the same time, this demand for the altcoin mainly comes from long-term buying positions. According to the long/short ratio, 54% of traders are in long positions.
When longs dominate the market, it means most traders feel optimistic and expect the price to rise.
Source: Santiment
Finally, Cardano's MVRV ratio has stabilized at 1.1, implying low selling pressure. With MVRV at 1.1, it indicates that profit-taking pressure is relatively low.
At this level, the price has room for growth before reaching overbought levels.
In summary, amid high activity from both whales and retail investors, ADA's growth momentum is increasing. With positive sentiment, Cardano is well-positioned to continue making gains.
Therefore, if buyers continue to dominate, ADA could reclaim the $1.2 level, where it has faced multiple rejections, and a breakout from here would push this altcoin up to $1.5.
Conversely, if a market correction occurs, the altcoin will drop to $0.89.
