Cardano Whales Buying Up ADA as a Bull Run Looks Likely
Cardano keeps declining slowly but an upturn looks likely.
Key Takeaways
- ADA price continues to fall, but not for long
- On-chain data suggests accumulation
- Chart analysis points out a potential breakout to the upside
As the price of Cardano has been steadily declining, and it appears that whales are using this opportunity to stack up on the token. Cardano is in its Basho era – focused on network optimization, scalability, and interoperability.
Developers are working on upgrading the overall network performance to support decentralized applications, as its DeFi ecosystem grows rapidly with TVL reaching 200% YoY.
With the expected release of Mithril , a protocol that improves the speed and efficiency of nodes’ syncing times, and lead developers working on Hydra, a layer-2 solution to boost scalability further using off-chain channels, it is apparent why Cardano whales are bullish.
Cardano Price Analysis
After falling down to $0.23 in December 2022, the price of Cardano made a recovery to $0.462 in mid-April this year. It then proceeded to revisit the prior low levels on June 10. Aretest ended as a bounce, making a small recovery and finally spiking to $0.375 on July 14.
Finally, from mid-July, we have seen another downtrend but with low volatility and volume. The price is currently being traded at $0.289, which is still a higher low compared to July’s.
The RSI and MACD are showing what the candlestick chart is showing – the price is just slightly below its mid-range. This range lasts for 228 days, measured from its December low so that it might be interpreted as the accumulation zone. July’s high was a lower high compared to mid-April, but we have also seen higher lows.
The range is getting tighter and with low volatility, which is indicative of the larger moves ahead.
Sign of Whale Accumulation?
Looking at the supply distribution charts, we do see that certain cohorts have been increasing their token holding. The charts below represent native units holding, meaning the token itself and not its USD value.
The cohort of greater than 1M units has increased their holding since mid-July throughout the following decrease but has started decreasing again. Currently, they have 21.51B, which is still lower than its June peak of 21.69B.
That the current holdings are still less than June’s also applies to the cohort of holdings 100K+. At the time of writing, August 15, they had 27.43B, while its June peak was at 27.47 B.
The only cohort that showed decisive accumulation is the one of 10K+. From the start of the year, they had a total of 31.39B and, from there, have made a sustainable uptrend, now reaching 31.67B, which is the maximum they ever had.
While we have seen signs of accumulation, the total holdings in the cohorts we would consider whales haven’t been as active as in the 10k+ cohort. Either way, this is bullish for Cardano and this cohort of retail investors could just spark a breakout from the horizontal range in which the price, causing the whales to pay attention.
Cardano Price Prediction
The price of ADA could have started an upward move in December last year, leading to a breakout above $0.41. As this level is the horizontal zone’s resistance level a breakout above it indicates the start of a bull cycle.
Another possibility could be that from the all-time high, we are seeing a WXYXZ bear market correction developing. In this case, the horizontal structure from last December is the second wave X, and after its completion, another bear market low would occur.
So which is more likely?
Zooming into the hourly chart and analyzing the price structure from June 10, we can say there is a higher possibility that the structure is bullish. The main differentiator between these two scenarios is the wave structure in these two waves.
If it’s an impulse wave, then it should have a five-wave structure, and if it’s a corrective wave B, it took is sub-divided into a three-wave structure. And the decline in which the price is currently, if the count is bullish, should be a corrective one, and if the count is bearish should be impulsive.
The increase seen from June 10 and the decline from July 14 are more adequate for the bullish count. However, since we are in decline, we can evaluate these possibilities by where and how the current decline ends.
We see a descending triangle from July 14, in which an ABCDE correction is made. If this is true, a breakout to the upside would be expected momentarily as the price has approached the triangle apex and retraced by 0.5 from wave 1.
On the other hand, if the price continues to fall and breaks the triangle from the downside, going below the 0.618 Fibonacci retracement level, it would mean that it is headed for another lower low according to the bearish count.
Conclusion
With its recent technical developments, the expected ones, and the growth of Cardano DeFi, there are numerous reasons to be bullish on this token. On-chain doesn’t suggest whale accumulation but that certain cohorts are more interested than others while at least the bigger ones are not putting selling pressure.
Chart analysis shows us that the price is still in the mid-range of the horizontal zone. If the price manages to go above it, it could be an early signal that the bull run for Cardano has started.
Disclaimer
Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.
