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Cardano (ADA) is seeing a significant bull run, with its price increasing 300% in the past five weeks. This altcoin recently surpassed $1 USD, reaching its highest level in nearly two years.
While this upward momentum has spread optimism among investors, it has also led to profit-taking, with many viewing current levels as an opportunity to sell.
Cardano Investors Focus on Profits
ADA retail investors have been actively selling in recent weeks. The data indicates that wallets holding between 100 and 10,000 ADA sold over 72 million ADA at a value of over 92 million USD. This selling trend has lasted for more than a month, reflecting continuous profit-taking among retail investors.
Although the selling volume by retail investors is significant, it is not as impactful as the large transactions made by sharks.
Although a large amount of ADA was sold by small investors, the market still did not witness a sharp decline in price. However, this selling activity could be a warning signal for investors, with some choosing to take profits rather than hold altcoins through possible market volatility. The trend of taking profits by Cardano investors, while not enough to trigger a major sell-off, could create downward pressure on the price if it continues.
Cardano’s macro momentum is a bit more comprehensive. The DAA Divergence Index indicates that although ADA price is increasing, market participation is not increasing at a corresponding rate. This divergence is often considered a bearish signal, as it suggests that the rally may be due more to speculative buying than to natural interest and sustained inflows.
The lack of increased participation, especially from large investors, raises concerns about the sustainability of current price levels. If this divergence continues, it could lead to a price correction, where large investors may be less inclined to continue buying during the rally. The stagnation in market participation could lead to a decline in price momentum in the coming weeks.
ADA Price Forecast: Maintain Profits
Cardano’s price has surged 25% this week, reaching $1.29, taking the altcoin to its highest level in nearly two years. This increase reflects growing optimism among investors and traders.
Current momentum is important as ADA approaches key resistance levels. Many are watching to see if this rally can be sustained, especially with the psychological $1.30 level present.
For Cardano to maintain its upward momentum, it needs to turn the $1.30 resistance into support. If it holds above this level, the rally could continue. However, if it fails to do that, Cardano may have to retreat to the $1.01 support level, erasing recent gains and possibly signaling the end of its bullish momentum.
If Cardano holds the $1.30 support, the next target could be $1.50. A breach of this level would strengthen the bullish outlook, confirming that the current rally is likely to continue. Such a scenario would refute the bearish thesis and signal continued growth, making $1.50 the next key resistance level.
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