The recent drop in the price of Cardano (ADA) below the $0.7 mark has left many investors puzzled. The crypto token experienced a significant correction from its monthly peak of $0.8, which was recorded on March 14. Since then, Cardano has struggled to regain its previous highs. This article delves into the potential reasons behind this price struggle.
One plausible explanation for the decline in Cardano’s price is the reduced whale transaction count on the network. Data from the crypto analytics platform Santiment indicates that transactions involving amounts of $100,000 or more have declined since March 14. This suggests that ADA whales started to take profits at the peak of $0.8 and have been gradually exiting their positions ever since. Whales have a significant impact on the market, and their actions often lead to price drops as they sell off their holdings.
Profit-Taking Trend
It is important to note that the profit-taking trend observed in the ADA ecosystem is not unique. In recent weeks, many investors across different crypto tokens have been cashing out their profits. Even Bitcoin, the flagship cryptocurrency, saw investors taking profits after its parabolic run to a new all-time high of $73,750. Long-term ADA holders also seized the opportunity to take profits, as evidenced by a substantial amount of dormant ADA tokens being transacted on March 20.
While the recent wave of profit-taking has put pressure on Cardano’s price, the crypto token is showing signs of recovery. However, this recovery seems to be happening at a slower pace. Many are hopeful that Cardano will be able to break the $1 resistance level in its next upward move. Analysts like Dan Gambardello have even predicted that ADA could reach $1.4 to $1.5 if it manages to surpass the $0.8 price range.
Despite the current price struggles, there is optimism that ADA whales will soon re-enter the market. Transactions involving amounts greater than $100,000 are expected to increase, indicating that investors may be looking to accumulate more ADA at lower prices. This accumulation by whales could potentially drive up Cardano’s price, depending on their bullish sentiment towards the token.
As of the time of writing, ADA is trading at approximately $0.6513, reflecting a nearly 4% decrease in the last 24 hours according to data from CoinMarketCap. While the price struggles below $0.7, there is anticipation in the market for a possible turnaround in the near future.
The drop in Cardano’s price below $0.7 can be attributed to various factors, including whale activity, profit-taking by investors, and overall market trends. While the current situation may seem challenging, there is hope for a potential recovery and upward price movement in the coming days. Investors are advised to conduct their own research and exercise caution when making investment decisions in the volatile crypto market.
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