Decentralized finance (DeFi) cryptocurrency Cardano (ADA) has recorded an uptick in whale activity, a shift that remains key to helping the asset sustain its price above $1.
The whales accumulated over 100 million ADA in the past 24 hours, coinciding with a period when the token attempted to stabilize around the $1.22 spot, according to data shared by cryptocurrency on-chain analyst Ali Martinez in an X post on December 5.
Specifically, the purchase involved wallets holding between 1 million and 10 million ADA. Historically, when these high-net-worth wallets accumulate an asset in large quantities, it has always acted as a precursor to further price growth.
ADA’s path to $1.5 resistance
Indeed, if the capital inflow is sustained, ADA will likely target the $1.50 resistance level, validating its recent price breakout after months of consolidation below $1.
Regarding price movement, Martinez had observed in an earlier post that ADA is forming a classic ascending triangle pattern.
Notably, this pattern is a bullish continuation signal, suggesting prices will likely break upward and continue a prior uptrend. The analysis noted that if ADA breaks the $1.23 resistance, the movement could open a path to $1.50.
However, Martinez has previously issued warnings about a potential ADA crash. According to a Finbold report on December 2, the prominent analyst suggested that the digital currency could experience a sharp drop to $0.88, as the chart had formed a rising wedge pattern—a bearish reversal indicator.
Overall, ADA’s price movements are tied to general market sentiment, which has turned bullish following speculation about Donald Trump’s re-election and the nomination of Paul Atkins as the next Securities and Exchange Commission chair.
Meanwhile, several on-chain developments aimed at increasing Cardano’s use cases support this momentum. For instance, on December 4, Cardano’s layer-2 scaling solution, Hydra, recorded 2 billion transactions in just 4 hours, surpassing the daily transaction volume of global payment giants like Visa.
ADA price analysis
In terms of price movement, ADA is showing short-term volatility. As of press time, it was trading at $1.20, with modest gains of less than 0.1%; on the weekly chart, it is up 21%.
ADA’s market sentiment is positive, bolstered by the Fear & Greed Index reading of 84, which indicates ‘Extreme Greed.’
From a technical standpoint, ADA is trading well above its 50-day and 200-day simple moving averages (SMA) at $0.6149 and $0.4626, respectively, signaling a possible continuation of bullish momentum.
However, the 14-day Relative Strength Index (RSI) is at 78.52, suggesting the asset is overbought and may be approaching a potential correction.
In conclusion, ADA is dominated by bullish sentiment, but the RSI reading and the extreme greed signal caution, as these momentum indicators point to a possible brewing correction.
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