Cardano (ADA), the smart contracts platform that aims to dethrone Ethereum, is facing a balancing act. Although the token’s price has seen a recent increase, a possible exodus of large investors casts a shadow of doubt.
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Will whales drag ADA down?
On-chain data reveals a cause for concern for Cardano bulls. Addresses that contain a significant amount of ADA (between 1 million and 1 billion tokens) have been selling their holdings. This behavior of the “whales”, as these large investors are known, could be a bearish indicator, suggesting a loss of confidence in the future of the project. Historically, these sales have often preceded price drops.
While some may see low volatility as a sign of stability, in the case of ADA, it could be hindering growth. The token’s current low volatility acts as a force field, keeping price fluctuations in check. This can be positive, preventing sudden falls. However, it also restricts upward momentum and makes significant price increases less likely.
![Cardano bloodbath? Liquidation raises fears of falling ADA price 1 A cc2ab7](https://thegurumedia.com/wp-content/uploads/2024/06/A_cc2ab7.png)
Consolidation or correction?
Two potential scenarios for the ADA price were observed. If whale selling pressure intensifies, ADA could return to its previous support level between $0.42 and $0.44. This consolidation phase would represent a pause in the token’s upward trajectory.
However, there is a more worrying possibility. A significant increase in sales could trigger a correction, pushing the price down to $0.42 or even lower. This scenario would be a setback for ADA bulls, potentially erasing recent gains.
Cardano Bulls look for a lifeline
Despite the downtrends, there are reasons for cautious optimism. First, ADA defied selling pressure from whales with a price increase of nearly 5% in the last week. This resilience suggests that there may still be enough buying pressure to offset the selling.
![Cardano bloodbath? Liquidation raises fears of falling ADA price 3 A c01bac](https://thegurumedia.com/wp-content/uploads/2024/06/A_c01bac.png)
Secondly, a little Cardano price forecasts remain optimistic. Sources anticipate a rise to $0.46 by July 8. Whether this forecast comes to fruition depends on market forces, but it offers a potential silver lining for investors.
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The Fear and Greed Index
Adding another layer to the complex situation is current market sentiment. The Fear and Greed Index, a measure of investor sentiment in the cryptocurrency market, is currently at 72, indicating “Greed.”
This general bullish sentiment could provide some support for ADA, but it is important to remember that the index reflects the broader market, not just Cardano specifically.
Featured Image from Pngtree, Chart from TradingView