- Cardano broke out of a descending channel, reclaiming the range formation from February.
- Reduced activity coincided with the weekend, and could recover.
Cardano [ADA] broke out of a short-term descending channel a week ago. This breakout was accompanied by $880k worth of short liquidations in under 24 hours, fueling the aggressive breakout.
Another report highlighted whale accumulation and reinforced the importance of the $0.75 support level.
The evidence on-chain showed some conflicting signs. Whale accumulation was true only for certain cohorts of holders, and on-chain activity has taken a hit in the past few days.
Network activity slows down
Source: Santiment
The daily active addresses and the transaction volume metrics saw a sharp drop on Friday, the 9th of May.
The activity was depressed over the weekend, which was uncommon for the transaction volume, but common for the daily active addresses.
Not all slumps in activity coincide with the weekend, however. The daily active addresses at press time were still higher than the values it registered for the majority of April.
The token velocity also dropped alongside the transaction volume over the past few days. This came alongside a price hike, showing reduced sell pressure and not much profit-taking activity, a sign of accumulation.
Source: Santiment
This idea had some evidence. Over the past month, the 10 million- 100 million ADA holder cohort has added 1% of the circulating supply of Cardano.
This translates to $296 million worth of tokens based on the price at press time.
However, this whale cohort was the only consistent buyer over the past month. The 100 million — 1 billion holders added to their bags over the past three days, too.
Meanwhile, other groups appeared to be selling, with only retail showing steady buying since February.
Source: ADA/USDT on TradingView
The 1-day price action chart showed that Cardano fell below the range lows at $0.68 toward the end of March, but has recovered. The same level was retested as support on the 8th of May.
At press time, the bulls were holding on to the $0.8 support zone.
The 20 and 50-period moving averages showed that bullish momentum was dominant. The next price target was the mid-range resistance at $0.91.
The rising OBV showed steady buying pressure, which should help ADA rally higher.
