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Cardano’s recent price surge is attracting attention but might halt before hitting the $0.38 mark. This is primarily due to a rise in profit data among ADA investors, spurring selling activity. The price uptick provided the much-anticipated recovery for the network following a July crash that saw the price plummet to a nine-month low.
What’s Driving ADA’s Recent Moves?
In the past 24 hours, ADA experienced an 8% increase, and within three days, 12% of the ADA supply turned profitable. This swift change to profitability might trigger a wave of selling as investors look to secure their gains. Consequently, the increased temptation to sell among ADA holders could exert downward pressure on Cardano’s price, potentially disrupting recent gains and introducing volatility to the market. Notably, the average holding period for ADA has now extended to five months, indicating that even medium-term holders are opting to sell.
When older tokens begin to move, it influences price dynamics because these holders are often seen as resilient. Their actions suggest diminishing confidence, which could result in a loss of recent gains for Cardano.
ADA Chart Analysis
Cardano’s price is struggling to break above the $0.37 resistance level, attempting to establish it as a support base. Historically, a bounce from this point has led to gains; however, given the current circumstances, overcoming this resistance may be challenging. If ADA fails to breach this level, it could drop to $0.34 and enter a consolidation phase.
Conversely, a successful break above this resistance could drive ADA to the $0.40 mark. Surpassing this level would then set the stage for testing the $0.42 resistance, thus nullifying the bearish outlook. If the memecoin trend on the Tron network extends to Cardano, ADA’s price could also see a favorable response.
Actionable Insights for Investors
- Monitor ADA’s price movement around the $0.37 resistance level closely.
- Consider potential sell-offs from long-term holders as a signal for market volatility.
- Keep an eye on the broader crypto market trends, particularly the memecoin activities on other networks.
In conclusion, while Cardano’s recent price actions show promise, the looming possibility of significant sell-offs could put pressure on its upward momentum. Investors should remain vigilant and consider the factors discussed to make informed decisions.