TLDR
- Whale addresses purchased over 420 million ADA (worth $289 million) in April
- ADA is trading around $0.69, struggling to break the $0.74 resistance for over 5 weeks
- RSI is at a two-month high, sitting above the neutral 50.0 mark, suggesting bullish momentum
- Developer activity is strong with 21,439 GitHub commits last year, surpassing Ethereum
- On-chain metrics show declining usage with transaction fees down 52% and trading volume dropped from $1.8B to $640M
Cardano (ADA) is experiencing mixed signals as large investors continue to accumulate the token despite price struggles at key resistance levels. The cryptocurrency is currently trading at around $0.69, just below its previous support level of $0.70, while facing challenges in breaking through the critical resistance level of $0.74.
In April, whale activity surged with addresses holding between 10 million and 100 million ADA purchasing over 420 million tokens. This large-scale accumulation amounts to approximately $289 million, raising their total holdings from 12.47 billion to 12.89 billion ADA.
The consistent buying by these large investors suggests confidence in ADA’s long-term value, even as short-term price movements have been disappointing. Whale activity can significantly influence market sentiment, often leading to price increases when they accumulate assets in large quantities.
Technical indicators show promising signs for Cardano’s price. The Relative Strength Index (RSI) is currently sitting at a near two-month high, positioned above the neutral 50.0 mark in the positive zone. This indicates that ADA is gaining bullish momentum, which could signal a potential price increase in the near future.
Despite these positive indicators, ADA has struggled to break through the $0.74 resistance level for over five weeks. This price point has acted as a key barrier, preventing ADA from moving into higher price territory and keeping it trapped within a tight range.
Historic Pattern Recognition
Current market conditions show patterns similar to those that preceded Cardano’s massive rally in 2021, when ADA reached an all-time high of $3.10. The cryptocurrency broke a key resistance level in November and has since been testing this zone as new support, echoing the pattern that led to a 4,000% surge during the previous cycle.
The derivatives market also reflects bullish sentiment, with the Open Interest Weighted Funding Rate standing at 0.0086%, indicating that traders prefer to establish long positions. Recent activity saw traders move approximately $20 million in ADA off major exchanges, a trend that commonly signals longer-term holding strategies.
While ADA is testing the critical support level at $0.66, a failure to hold above it could result in further declines. If ADA drops below this support, it could face additional downward pressure, potentially pushing the price down to $0.60.
Development vs. Usage Metrics
Cardano has emerged as a leader in developer activity, surpassing Ethereum with 21,439 GitHub commits in the previous year across 550 core repositories. This surge in development counters long-standing criticism about Cardano lacking meaningful activity.
The increased technical output spans 12 foundational projects, enhancing the blockchain’s long-term credibility for growth. Over 4,000 repositories reflect broader ecosystem engagement, underlining an expanding development community.
Despite strong development, on-chain usage metrics present a more cautious picture. Transaction fees on ADA fell 52% over the past quarter, totaling just $8,100 now. This decline might indicate reduced user demand or fewer actively used on-chain applications.
Trading volume has also fallen since its peak in February, dropping from $1.8 billion to around $640 million. These cooling volume figures raise questions about excitement levels among traders and users alike.
Substantial accumulation activity over the last two months provides a bullish indicator. According to data from Coinglass, purchases totaled $379 million worth of ADA across seven consecutive weeks. This represents about 1.7% of the digital currency’s $22 billion market capitalization.
The next few weeks will be critical in determining ADA’s short-term direction. If ADA can break through the $0.74 resistance and maintain support at $0.66, it could see a price increase in the coming months.
On the other hand, if ADA fails to hold above $0.66, the positive sentiment could shift, leading to a deeper correction. The key to ADA’s success will be its ability to maintain its support levels and continue to build momentum as it attempts to break through resistance.
ADA currently trades at $0.6996, hovering near the key support level of $0.70, following a recent breakout above the $0.60 mark.
