Cardano $ADA still maintains its position in the top 10 cryptocurrencies by market capitalization, despite its price having dropped more than 9% in the past week. However, recent ADX data shows that the bearish trend of ADA is weakening.
Weakening downtrend
The average directional index (ADX) of ADA is currently at 14.96, down sharply from above 30 just three days ago. This decrease suggests that the downtrend is gradually losing momentum, signaling the possibility of a halt or even a reversal if buying pressure returns to the market.
The ADX index measures the strength of a trend on a scale from 0 to 100, and does not indicate the direction of the trend. When the value is below 20, it suggests a weak or non-existent trend. Conversely, a value above 25 typically signals a strong trend. With Cardano's ADX at 14.96 and continuing to decline, the current downtrend is not strong enough to maintain significant downward momentum.
In the short term, this could mean that the price of ADA will stabilize or move sideways unless there is an increase in selling pressure that reinforces the downtrend. However, if selling momentum is lacking, the likelihood of a price recovery for ADA will increase as buyers gain the upper hand.
ADX of ADA | Source: TradingView
ADA whales stop net selling
The number of ADA whales (addresses holding between 10 million and 100 million tokens) reached a monthly high of 409 on December 14, before showing signs of gradual decline. Since December 22, the number of these whales has stabilized, fluctuating between 404 and 405, indicating that large investors have paused significant accumulation or distribution.
Monitoring whale activity is crucial, as these large addresses can significantly impact the asset's price through their buying and selling decisions. The stability of ADA whale activity in recent times indicates that the market is currently in a consolidation phase, lacking strong accumulation or distribution.
In the short term, this could cause the price of ADA to fluctuate within a certain range, due to a lack of decisive momentum from whales.
Addresses holding between 10 million and 100 million ADA | Source: Santiment
Can ADA regain $1 in December?
Currently, the price of ADA is trading near a crucial support level of $0.859. If this support level holds and an upward trend resumes, the price of ADA may challenge the next resistance level at $0.91.
Breaking through this resistance level could open up opportunities for the price of ADA to rise higher, targeting price levels around $0.99 and $1, marking a significant recovery and the potential shift towards an uptrend.
ADA 4-hour price chart | Source: TradingView
However, if the downtrend returns and the support level of $0.859 is breached, the price of ADA could continue to decline and face a risk of slipping 11.6% to the next support level of $0.76.
