Cardano price has seen a notable rise in recent days. As the profits made by ADA steadily increase, many large holders, or “whales,” have been enticed to sell their coins to lock in their gains.
This puts Cardano at risk of losing some of its gains over the coming days. this analysis details why.
Cardano whales are taking advantage
Cardano’s price rise over the past few days has led to an increase in profits made among its holders. As a reminder, realized profits reached a weekly high of $73.33 million on January 15 as the price of ADA climbed towards $1.15.
This rise in realized profits triggered a wave of coin distribution among ADA whales, reflected by the decline in net flow from its large holders. According to IntoTheBlock, this fell by 90% during the week in question.
Large holders are whale addresses that hold more than 0.1% of the circulating supply of an asset. Their net flow tracks the difference between the amount they sell and buy over a specific period.
A spike in the net flow of large holders of an asset indicates that significant amounts of the asset are moving into whale portfolios, suggesting accumulation. On the other hand, as with ADA, a drop in net flows shows that large holders are selling their holdings. This signals a potential decline in the asset’s price or a change in market sentiment.
ADA Price Prediction: Retest Breakout Fails, Reversal Likely
An evaluation of the ADA/USD daily chart reveals an unsuccessful attempt to retest the ADA breakout line. The coin now trades within the symmetrical triangle pattern, from which it has recently moved away.
When an attempt to retest a breakout fails, the price of the asset has not been able to maintain the breakout level, indicating weak support. This confirms the reversal of ADA’s uptrend. If the decline continues, ADA price will fall to $0.94.
On the other hand, if market sentiment improves, it could push ADA price above the upper line of the symmetrical triangle, which forms resistance at $1.03.
Disclaimer
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