Cardano [ADA] has seen a significant rise from its low of $0.878 to $1.119, representing a 23.80% increase on a weekly basis.
Subsequently, the cryptocurrency experienced a minor pullback on daily charts, with the current price hovering around $1.106, marking a 1.23% increase in the last 24 hours.
The recent surge in price has sparked discussions among analysts regarding the driving forces behind this upward movement. Popular crypto analyst Ali Martinez attributes the rise in ADA prices to heightened buying pressure.
Significant Purchase of 40 Million ADA Tokens by Cardano Whales
Martinez’s analysis reveals that Cardano whales have been actively acquiring ADA tokens, purchasing over 40 million tokens within the last 48 hours.
When whales engage in significant buying activity, it signals a bullish sentiment and a strong belief in the market’s potential for growth.
Moreover, it’s not only whales showing interest in ADA; retail traders are also demonstrating active participation, with a notable increase in buying activity observed since the beginning of the year.
The surge in the Relative Strength Index (RSI) from 39 to 62 further supports the presence of robust buying pressure, indicating a market dominated by buyers.
Interpreting ADA Chart Trends
With both whales and retail investors driving increased buying activity, the outlook for ADA appears favorable for further price appreciation.
An analysis by CryptoCrypto highlights the strong upward momentum in Cardano, fueled by growing demand for the cryptocurrency.
Evidence of rising demand can be seen in Cardano’s increasing scarcity, as reflected in the climbing Stock-to-Flow Ratio, which now stands at 133.7.
An uptrend in the Stock-to-Flow Ratio suggests a limited supply of ADA relative to demand, which typically leads to price appreciation.
Furthermore, the preference for long positions indicates a bullish sentiment among traders, with 54% of participants opting for long positions.
An overwhelming presence of longs in the market signals expectations of price growth and a positive market outlook.
Cardano’s MVRV Ratio settling at 1.1 implies a low selling pressure environment, suggesting that any potential profit-taking activities are currently subdued.
With the MVRV Ratio at 1.1, there is room for further price advancement before encountering overbought conditions.
In conclusion, with increased engagement from both institutional investors and retail traders, Cardano’s upward momentum appears to be strengthening. Bolstered by positive market sentiment, ADA is well positioned to achieve additional gains.
Therefore, sustained buyer activity could propel ADA to surpass the $1.2 resistance level, potentially leading to a breakout towards $1.5.
Conversely, in the event of a market correction, ADA may retrace to the $0.89 support level.