Is Cardano (ADA) Preparing for a Bullish Recovery After a Significant Price Correction?
Cardano’s (ADA) price experienced a substantial decline of over 25% on the daily chart over the weekend, following the broader market trend. However, as ADA now shows signs of potential recovery, bullish signals from investors suggest a possible rally in the cryptocurrency.
Historically, Cardano’s price has been influenced by the actions of ADA holders, and this could play a crucial role in its recovery. Recent data reveals that whale investors on the Cardano network are increasing their holdings. Addresses holding between 1 million to 10 million ADA have purchased over 30 million ADA worth $14.6 million in the last three days. Despite the recent correction, this accumulation indicates that whales are anticipating a price rise and are positioning themselves accordingly.
Additionally, Cardano is currently situated in the peak accumulation zone, as indicated by the Market Value to Realized Value (MVRV) ratio. The MVRV ratio assesses investor profit/loss, and Cardano’s current 30-day MVRV of -19% suggests losses for recent buyers. Historically, ADA recovery has occurred within the -13% to -21% range, implying that this could be an optimal opportunity zone for accumulation.
Considering these factors, it is likely that Cardano’s price will benefit from the actions of these investors. ADA’s current price of $0.48 is already showing signs of recovery. With continued positive momentum, ADA may reclaim the support level of $0.56, representing a 25% increase for the third-generation cryptocurrency.
However, it is crucial for ADA to breach the resistance level at $0.50 to validate this bullish scenario. This level has been tested multiple times for both support and resistance, making it a significant barrier. Failing to break through this resistance could lead to a drawdown to $0.44, which may result in a further decline to $0.40.
Overall, the actions of ADA holders and the favorable MVRV ratio suggest that Cardano is well-positioned for a potential recovery and subsequent price rise.