Cardano, the platform for smart contracts that aims to unseat Ethereum is in a delicate balance. Although the price of Cardano (ADA) has increased in recent months, there is a possibility that major investors will leave.
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Whales will drag ADA down
Cardano data on-chain is a concern. A significant amount is held by a large number of addresses. ADA Between 1 million and one billion tokens, they have sold their stock. The behavior of “whales,” As these investors are called, they can be an indicator of a decline in confidence. In the past, these sell-offs often occurred before price drops.
While it may be viewed by some as a sign that ADA is stable, this could actually hinder its growth. Its low volatility currently acts as a forcefield, keeping the price swings under control. The low volatility can have a positive effect, as it prevents sharp price drops. It also limits the upward momentum, making significant price increases more unlikely.
Do You Need To Consolidate Or Correct?
The price of ADA could be affected by two scenarios. If the whales’ selling pressure increases, ADA might fall back to $0.42 or $0.44 as its old support level. This phase of consolidation would mark a stop in the upward trajectory of the token.
There is a much more serious possibility. An increase in sales could cause a price correction that would push the currency down to $0.42, or lower. The ADA bulls would suffer a blow in this scenario, as recent gains could be erased.
Cardano Bulls Look For A Lifeline
There are still reasons to be cautiously optimistic despite the negative undercurrents. First, ADA defied whale pressure to sell with a price rise of nearly 5% in the past week. It is possible that the buying pressure could still offset any sales.
Cardano price predictions remain bullish. According to sources, the price of gold is expected to rise by $0.46 on July 8th. Whether or not this prediction comes true depends on the forces of the market, but there is a silver lining here for investors.
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The Fear & Greed Index
Market sentiment is another factor that complicates the situation. The Fear & Greed Index, a measure of investor sentiment across the cryptocurrency market, currently sits at 72, indicating “Greed.”
The overall positive sentiment may provide some support to ADA. However, it is important to keep in mind that the Index reflects not only Cardano, but the broader markets as well.
Chart from TradingView, image from Pngtree
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Source: www.newsbtc.com