Cardano price has seen a sharp increase in the past few days. As ADA’s realized profits steadily increased, many large holders, or “whales”, sold their coins to take profits.
This puts Cardano at risk of possibly losing some of its gains in the next few days. This analysis details why.
Cardano whales take profits
The recent increase in Cardano price has led to an explosion in admitted profits among holders. Specifically, admitted profits reached a weekly high of $73.33 million on January 15 as the ADA price approached $1.15.
The explosion in admitted profits triggered a wave of coin distribution among ADA whales, reflected in a drop in major holder net inflows. According to IntoTheBlock, this was down 90% in the week under review.
Large holders are whale addresses that hold more than 0.1% of the asset’s circulating supply. Their net cash flow tracks the difference between the amount they sell and buy over a certain period of time.
The increase in large Holder’s net inflows suggests that a large amount of assets are being transferred to whale wallets, suggesting accumulation. However, as with ADA, the decline in net cash flow suggests that large holders are selling off their holdings. This signals a possible decline in the asset’s price or a change in market sentiment.
ADA price prediction: Breakout test fails, reversal likely
A review of the one-day ADA/USD chart shows a failed breakout test. The coin is currently trading within a symmetrical triangle pattern, which it broke out of previously.
When the breakout test attempt fails, the asset price cannot sustain the breakout, indicating weak support. This confirms a reversal in ADA’s uptrend. If the decline continues, ADA price will fall to 0.94 USD.
Conversely, if market sentiment improves, ADA price could push above the resistance line of the symmetrical triangle, creating a resistance level at $1.03.