Is Cardano (ADA) Preparing for a Recovery After a 25% Price Correction?

Cardano’s (ADA) price followed the broader market cues, which declined by more than 25% on the daily chart over the weekend.

As ADA gears up for a potential recovery, investors display bullish signals that may pave the way for a rally in the cryptocurrency.

Cardano Investors Can Take Back Control

Cardano’s price has historically reacted to ADA holders’ actions, which could be key to recovery. The whale investors conducting transactions on the network are increasing their holdings.

The addresses holding between 1 million to 10 million ADA have purchased more than 30 million ADA worth $14.6 million in the last three days. This is despite the recent correction suggesting whales are expecting a price rise and are accumulating accordingly.

Cardano Whale Holding. Source: Santiment

Furthermore, the asset is in the peak accumulation zone, looking at the Market Value to Realized Value (MVRV) ratio.

The MVRV ratio gauges investor profit/loss. Cardano’s current 30-day MVRV of -19% suggests losses for recent buyers, possibly leading to accumulation. Historically, ADA recovery happens between -13% and -21%, identifying it as an opportunity zone for accumulation.

Cardano MVRV Ratio. Source: Santiment

Thus, Cardano’s price could benefit from the investors’ actions.

ADA Price Prediction: Recovering the Losses

Cardano’s price trading at $0.48 is already on its way to note recovery. Considering the above-mentioned factors, ADA could possibly continue this recovery to reclaim the support of $0.56, 16% above the present price. This would mark a 25% rise for the third-generation cryptocurrency.

ADA/USDT 1-day chart. Source: TradingView

On the other hand, if ADA fails to breach the resistance marked at $0.50, it could invalidate the bullish thesis. This line has been tested multiple times for both support and resistance, cementing it as a crucial barrier.

Failing to breach it would result in a drawdown of $0.44, which could cause a fall to $0.40.


Click to rate this post!
[Total: 0 Average: 0]
Show More