Cardano (ADA) price has been in a downtrend recently, raising concerns about a possible drop below the $1 support level.
A major contributor to this decline is selling activity by large ADA holders, often referred to as whales. These Cardano investors are selling their coin holdings, likely to capitalize on recent gains to lock in profits.
Whales in Cardano cause sell-off
BeInCrypto’s review of Cardano’s on-chain performance revealed that its whales have sold a significant portion of their holdings over the past week. According to Santiment, large holders holding between 100,000,000 and 1,000,000,000 ADA have distributed $200 million worth of coins in the past seven days.
When large holders of a cryptocurrency sell their coins, it indicates a decline in confidence in the asset and creates significant selling pressure in the market. This can drive prices down, especially if the market lacks enough demand to absorb the large sell-off. This trend can also trigger further panic selling by smaller investors, further pressuring the asset’s price.
Moreover, the profitability of ADA transactions over the past few days has contributed to the surge in selling. Santiment data shows that the network’s P/L for the coin has been consistently positive over the past seven days, indicating that traders have been selling for profit.
This may have prompted other investors to sell their ADA tokens to secure their gains, contributing to its price drop over the past few days.
ADA Price Prediction: $1.07 Price Level Is Key
As of this writing, ADA is trading at $1.02, which is slightly below the resistance formed at $1.07. Any attempt to break through this resistance level will fail if the sell-off continues. This could lead to a drop below the $1 to $0.92 price zone.
On the other hand, a successful breakout of this resistance would push the price of ADA to its two-year high of $1.34, last reached on December 3.
