Cardano (ADA) holders are showing their confidence with nearly $100 million withdrawn from exchanges in just two days, which is considered a sign of an uptrend.
Recent on-chain data shows that trading volumes are increasing in long-dormant tokens, and investor sentiment remains quite positive.
“ADA’s price has formed a bullish pennant on the 4-hour chart and a bounce towards $2 is expected,” a COINOTAG source said, drawing attention to ADA’s possible rally.
Cardano Holders Reinforce Bullish Trend with $100 Million Funding Withdrawal from Exchanges
Cardano investors are solidifying their bullish expectations by exiting exchanges with $100 million, indicating the potential for ADA’s price to return to $2.
Cardano’s price is currently trading at $0.98, just shy of its recent high of $1.15. This decline appears to be linked to broader cryptocurrency market volatility, such as Bitcoin’s recent drop below $95,000. However, investors appear to be unmoved, and evidence of this is the massive withdrawals from exchanges.
According to Coinglass data, the ADA Spot Inflow/Outflow ratio is at -$40 million. This rate is an improvement from -$63 million observed on November 25, indicating that Cardano bulls have withdrawn almost $100 million from exchanges. This generally indicates that selling pressure is low and there is upward pressure on the price.
Investors withdrawing their assets from stock exchanges usually indicates expectations of price increases. On the other hand, fund inflows to stock exchanges can increase selling pressure. Such dynamics are one of the important factors shaping market sentiment.
If the uptrend continues, a short-term jump in Cardano’s price could be observed. Another indicator supporting this potential is the Average Investment Duration (MDIA).
The MDIA metric measures the time a token remains on the blockchain by weighting it with its purchase price. An increase in MDIA indicates that tokens are less volatile and their prices are resistant to large fluctuations. However, a significant decrease in the 90-day MDIA for Cardano suggests that trading activity is increasing among previously dormant coins. This could indicate increasing buying pressure for ADA to rise.
On the 4-hour ADA chart, a bullish pennant formation is observed, which is divided into a short consolidation period after two significant price swings. An initial spike with strong buying momentum forms the flagpole. The subsequent pullback leads to the flag formation taking on a rectangular shape, indicating that the previous uptrend will continue at the moment of the breakout.
Considering the market dynamics and technical analysis, Cardano bulls seem to have the potential to push prices above the $1.15 level. A successful breakout could see ADA reach $2 levels. Otherwise, increasing selling pressure could push the price down to $0.85.