Cardano (ADA) Price Set to Lose Part of Its 27% Gains
beincrypto.com 14 July 2024 10:25, UTC Cardano’s (ADA) price had a surprising run-up over the last few days as the altcoin leveraged the broader market’s bullish cues.
However, this bullish sentiment is not matched by the whales, and it could be the same with ADA holders seeking to book profits.
Cardano Investors Seem Unsure
Cardano’s price rise could be overturned by investors who are very likely to sell their holdings for profits. This is visible in the Market Value to Realized Value (MVRV) ratio, a key metric for assessing investor profit and loss.
Currently, Cardano’s 30-day MVRV stands at 11%, indicating that many investors are in a profitable position. This profitability often leads to selling pressure as investors look to lock in gains, which can cause the price to correct.
Historically, Cardano tends to correct when the MVRV ratio is between 10% and 20%, a range often referred to as the “danger zone.” When the ratio reaches this level, it suggests that the market might be overheated, and a price correction is likely.
Read More: How To Buy Cardano (ADA) and Everything You Need To Know
While the signal only appeared over the past 48 hours, some groups of investors have been practicing it for a while now. The whale addresses have been selling for the past month. While not rigorously, this has continued despite the recent price rise.
The addresses holding between 1 million and 10 million ADA have sold more than 120 million ADA, worth over $52.6 million. They initially sold to offset losses, but now they seem to be selling solely to secure gains. This could negatively impact Cardano’s price.
ADA Price Prediction: Time to Test Supports
After an explosive rise of 27% over the week, Cardano’s price might find some resistance in continuing the rally. Trading at $0.44 at the time of writing, ADA could next test the support at $0.42.
The aforementioned factors paint a bearish picture, suggesting that a drawdown below this price is likely. The potential decline could send the crypto asset to $0.40, eliminating half of the recent rally.
Read More: Cardano (ADA) Price Prediction 2024/2025/2030
However, if ADA manages to bounce off $0.42, it could find some support to continue its rally. Reclaiming $0.45 as a support floor could further this rise, invalidating the bearish thesis once $0.46 is tested as resistance.
