What’s wrong with the housing market?
Cardano is trading on shaky grounds despite a recent increase in buying pressure.
Key Takeaways
- Cardano has retraced by more than 40% over the past month.
- At time of writing, ADA was sitting on top of vital support at around $0.75.
- Meanwhile, whales appeared to have entered a buying spree.
Cardano has reached a critical support area after incurring significant losses over the past month. Although buying pressure appeared to be increasing, there were a few obstacles it must overcome to avoid a steeper correction.
Cardano Sits On Vital Support
Whales were accumulating ADA, but the Layer 1 asset was still at risk of a correction.
ADA plummeted by more than 40% over the past month. It dropped from a high of $1.25 on Apr. 4 to a low of $0.73 on Apr. 30. The significant downtrend pushed Cardano below a critical area of support, which could mean further losses were on the horizon.
The formation of a parallel channel on the daily chart suggested that Cardano could drop to the lower boundary of this technical formation at $0.60 now that it breached the middle trendline. A sustained daily candlestick close below $0.75 could serve as confirmation of the pessimistic outlook.
It was worth noting that the buying pressure behind Cardano increased over the past few weeks despite the ongoing downtrend.
On-chain data from Santiment showed that the number of addresses holding more than 10 million ADA surged by 2.14% since Apr. 17. Roughly ten whales joined the network within this period.
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Each of these addresses had accumulated more than $8 million worth of ADA, which may help the price stay above $0.75. But to invalidate the bearish thesis, Cardano would have to reclaim $0.83 as support. Under such unique circumstances, it will have a good chance of rebounding to $1.
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