“It has to stop somewhere, right?”
This is the question that the majority of the crypto ecosystem has been asking since Cardano infringed $ 2. Okay, maybe not the Cardano community, but the rest of the market.
Now the altcoin may lose a lot of momentum at one point on the price charts. So what? If Cardano suffers its due corrections, these particular price zones could be suitable support ranges. In fact, each of these can sustain the long-term bullish narrative for the altcoin.
Cardano in the week; Reaching its peak?
Since early 2021, Cardano’s weekly surge has been tremendous. The asset has continued to strengthen for particular periods of time, but it has always moved around its 20 simple and exponential moving averages.
After each top, the price has dropped to the MAs, before rising again. That could be the case going forward as the market at the time of publication appeared to be supported by relatively lower volumes on a yearly average.
Now when it comes to profitability, none of the traders should complain. At the time of writing this article, 95.90% of the addresses were in the money, which is staggering.
But it also fuels the notion that now, the incentives to sell are greater. When investors are collectively profitable on paper, there have to be sellers to record the actual profits.
But why will merchants sell?
Rather than asking why merchants will sell, it is more important to consider the ranking of these merchants. According to the attached data, the ongoing rally is supported by merchants who have held ADA for less than a year. These addresses can be considered retail, as long-term hodlers began exiting the markets in May.
This leads to the inference that most of these traders probably already have more than 5x-6x in returns on average since the beginning of 2021. The incentive has never been more lucrative in the short term.
Traders sell, but then what?
Now, after laying the groundwork for a correction, these support levels are fundamentally accurate in terms of activity and volumes. Surprisingly, the total ADA volume between $ 1.74 and $ 2.57 is 4.84 billion ADA, which currently accumulates at 279k addresses. Therefore, an immediate correction range for Cardano will fall around the $ 2 mark.
In the long term, the next strongest volume range will be between $ 1.24 and $ 1.55, registering 4.65 billion ADA tokens.
However, such a massive drop cannot be expected at the moment, as the selling pressure of whales is collectively decreasing across the industry.
This is a machine translation of our English version.
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