Significant Whale Sell-Off Before a Volatile Period
Cardano (ADA) whales, who contributed to the cryptocurrency's 270% price increase over the past 30 days, have begun selling large amounts of tokens. This move comes just before a scheduled token unlock, which is expected to trigger significant volatility.
As of writing, ADA is trading at $1.23. The question remains: will this sell-off push the price further down?
Cardano Whales Start Offloading
On December 2, Cardano's net flow of large holders reached 63.58 million ADA, signaling strong buying interest among whales. The net flow metric tracks the difference between tokens bought and sold by major players. A positive net flow indicates accumulation, while a decline suggests selling pressure.
Since then, the net flow has dropped to 7.62 million ADA, indicating that whales sold 55.96 million ADA, likely to realize profits or rebalance their portfolios. At the current price of ADA, this sell-off amounts to approximately $69 million.
Upcoming Token Unlock as a Key Factor
This recent sell-off could be associated with the token unlock scheduled for December 6. Token unlocks, which release previously restricted tokens into circulation, often impact supply-demand dynamics, leading to significant price movements.
Data from Tokenomist (formerly Token Unlocks) indicates that 18.53 million ADA worth $22.79 million will be unlocked on this date. This supply shock could increase volatility and limit Cardano's ability to sustain its upward trend during this period.
ADA Overbought Signals a Possible Correction
Technical analysis on the daily chart reveals that Cardano's Bollinger Bands (BB) have expanded, indicating increased volatility. When the price approaches the upper band, it suggests an overbought condition.
The Relative Strength Index (RSI), which measures momentum, also points to ADA being overbought. The current RSI value is 82.15, significantly above the 70.00 threshold. This level strongly indicates a potential price correction, which could bring ADA's price down to $0.92.
Future Price Scenarios
If whales resume accumulating ADA, the trend could reverse, pushing the price as high as $1.33. However, the situation remains uncertain as the token unlock and overbought conditions create a highly volatile environment.
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