Cardano: Can ADA bulls target $1 as Open Interest surges?
The dormant circulation metric was low over the past month even when Cardano tested the $1 resistance, showing reduced selling pressure recently.
Key Takeaways
Cardano’s bullish breakout from the wedge pattern showed a move to $1 was imminent, but longer-term holders and whales were waiting for more gains as they continued to accumulate more ADA.
Cardano [ADA] saw negative spot exchange netflows, a pattern that suggested reduced selling pressure. Consistent outflows can be considered a sign of accumulation. ADA bulls have reason to be bullish for the coming weeks.
The breakout from the descending wedge also showed that a rally to $1 was likely.
Coinalyze data showed that Open Interest has climbed just over $90 million since the 5th of September, while the price moved higher by 9.9%. This was another sign of sustained bullish belief over the past week.
Ethereum [ETH] was poised for a bullish move after showing strength since July. An ETH move higher could spur altcoins to do well, including Cardano.
Cardano whale accumulation alongside a speck of profit-taking
In a post on X, Alphractal founder Joao Wedson pointed out that the whales were also accumulating more ADA. 29.6% of the total supply is held by the top 100 addresses, as shown by the top addresses’ share metric.
Long-term holders held 54% of the available Cardano tokens. The whale accumulation and LTH holding were a firm sign of bullish conviction in the project from major investors. However, it also represents a risk from concerted selling by whales.
Negative news that impacts Bitcoin [BTC] might also hit Cardano hard, especially if it causes the LTH holders to panic.
While this was not an imminent threat, it was still a threat investors should be wary of.
Examining the whale transactions in recent months, the price spike on the 14th of August saw increased whale activity and network activity in general. However, the dormant circulation did not experience a major surge.
This suggested that the rally to $1 last month was not accompanied by a large wave of profit-taking. This finding reinforced the idea of accumulation from large holders.
However, the Daily Active Addresses have been flat recently after the swell in mid-April. This showed that growth and activity have fallen to the average since March.
Overall, the metrics showed that holders believed Cardano could make further gains.
