The recent drop in the Cardano (ADA) price below the $0.7 psychological level has left many investors wondering about the reasons behind it. The crypto token experienced a significant correction from its peak of $0.8 in mid-March and has struggled to regain its momentum since then.
Data from the crypto analytics platform Santiment reveals that whale transactions, defined as transactions of $100,000 and above, on the Cardano network have decreased since March 14. This reduction in whale activity coincides with the period when ADA reached its high of $0.8, indicating that large holders of ADA may have started taking profits at that point and gradually exiting their positions.
The phenomenon of investors taking profits is not unique to Cardano, as other crypto tokens have also experienced similar trends in recent weeks. Bitcoin, the leading cryptocurrency, saw investors selling off their holdings after reaching a new all-time high of $73,750. This profit-taking behavior has had a ripple effect across the entire crypto market, including Cardano.
In addition to whales, long-term holders of ADA have also taken advantage of the recent price surge to realize profits. Data from Santiment shows that a significant amount of dormant ADA tokens, which had not been transacted for a year, were moved on March 20. This suggests that long-term holders are also capitalizing on the price increase to sell off some of their holdings.
Despite the recent downturn, there is optimism that Cardano could bounce back in the near future. Analysts predict that if ADA can break through the $0.8 resistance level, it could potentially reach prices between $1.4 and $1.5. Furthermore, the expected return of ADA whales with transactions exceeding $100,000 could signal a renewed interest in accumulating ADA at lower prices, which could drive the price up.
As of the time of writing, Cardano is trading at around $0.6513, representing a 4% decline in the last 24 hours. The market remains volatile, and investors should exercise caution when making trading decisions.
The recent price drop in Cardano (ADA) can be attributed to a combination of factors, including profit-taking by whales and long-term holders, as well as broader market trends. While the market outlook remains uncertain, there is potential for ADA to recover and reach new highs in the future. Investors should stay informed and conduct thorough research before making any investment decisions in the crypto space.