Whale Activity Fuels Cardano (ADA) Price Despite Stretched Resistance Levels

Cardano (ADA) is experiencing mixed signals as large investors continue to accumulate the token despite price struggles at key resistance levels.

Cardano (ADA) is showing mixed signals as large investors continue accumulating the token despite price struggles at a key resistance level.

What Happened: Cardano is currently trading at around $0.69, testing the previous support level of $0.70 for a third time. The cryptocurrency is also facing challenges in breaking through the critical resistance level of $0.74, which it has struggled to overcome for over five weeks.

In April, there was a surge in activity by whales, or addresses holding between 10 million and 100 million ADA, with these large investors purchasing over 420 million tokens.

This large-scale accumulation saw the whales increase their holdings from 12.47 billion to 12.89 billion ADA, amounting to approximately $289 million in purchases.

The consistent buying by these large investors suggests confidence in ADA’s long-term value, even as short-term price movements have been disappointing.

Why It's Important: Whale activity can significantly influence market sentiment, often leading to price increases when they accumulate assets in large quantities.

Technical indicators also show promising signs for Cardano’s price. The Relative Strength Index (RSI) is currently sitting at a near two-month high, positioned above the neutral 50.0 mark in the positive zone.

This indicates that ADA is gaining bullish momentum, which could signal a potential price increase in the near future.

However, ADA has struggled to break through the $0.74 resistance level for over five weeks. This price point has acted as a key barrier, preventing ADA from moving into higher price territory and keeping it trapped within a tight range.

Current market conditions show patterns similar to those that preceded Cardano’s massive rally in 2021, when it reached an all-time high of $3.10.

The cryptocurrency broke a key resistance level in November and has since been testing this zone as new support, echoing the pattern that led to a 4,000% surge during the previous cycle.

The derivatives market also reflects bullish sentiment, with the Open Interest Weighted Funding Rate standing at 0.0086%, indicating that traders prefer to establish long positions.

Recent activity saw traders move approximately $20 million in ADA off major exchanges, a trend that commonly signals longer-term holding strategies.

While ADA is testing the critical support level at $0.66, a failure to hold above it could result in further declines. If ADA drops below this support, it could face additional downward pressure, potentially pushing the price down to $0.60.

Stay tuned for more crypto news and analysis.

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