Cardano: Deciphering if ADA whales are encouraging bearish action
- ADA whales contribute to selling pressure as others take advantage of the discounted prices.
- A look at why ADA is back to its support range and the next major support levels to look out for.
Traders keeping tabs on Cardano’s ADA may have noticed that the cryptocurrency has been hovering within a major support level. Accumulation is expected to take place near such a zone but despite that, its price action has become even more dormant. Almost as if there is no bullish activity.
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Recent findings revealed that whales have been dumping ADA. The subsequent sell pressure suppressed any existing bullish momentum. The whales have reportedly sold roughly 1.02 billion ADA coins valued at around $265 million.
— Ali (@ali_charts) September 7, 2023
So, why haven’t we seen a significant price movement despite the selling pressure? As noted earlier, ADA has been hovering within a significant support level. Significant accumulation is bound to take place at such levels especially considering ADA’s heavy discount.
If that were so, then any considerable sell pressure would cancel out the prevailing bullish momentum caused by accumulation at the current range.
ADA whales engage in the price balancing act
Evaluating ADA’s on-chain activity revealed that whales might be canceling out the bullish momentum. ADA kicked off September with a surge in its weighed sentiment metric.
This confirmed that there was a surge in bullish expectations. Additionally, its mean coin age has also been rising steadily in the last four weeks. This suggested a preference toward long-term hodling.
The key point to note here is that the weighted sentiment spike was short-lived. A glance at ADA’s supply distribution confirmed that there was a sizable amount of buying pressure coming from various whale categories. This was especially true for those in the 1 million to 10 million (green) and 100 million to 1 billion range (yellow).
Interestingly, addresses that control the largest percentage of ADA’s circulating supply have been contributing to sell pressure. These whales fell in the 10 million to 100 million range (denoted in pink).
Will ADA capitulation be the next outcome?
Now that we have established that some whales have indeed been suppressing the price, it is worth considering the next move. ADA’s press time support level represented a healthy accumulation zone but it does not guarantee immunity from more downside. However, a further discount would present more appealing price levels that could possibly attract a lot of activity.
Realistic or not, here’s ADA’s market cap in BTC’s terms
ADA exchanged hands at $0.257 at press time. Traders should anticipate the next support levels within the $0.24 and $0.23 range in case further capitulation takes place.