The price of Cardano (ADA) has seen a surprising surge in the past few days as the altcoin capitalized on bullish signs across the market.
However, this bullish sentiment is not being matched by whales, and likely ada holders looking to lock in profits as well.
Cardano investors seem worried
Cardano’s price rally could be reversed by investors who are likely to sell their holdings to take profits, as reflected in the market value to realized value (MVRV) ratio, a key metric for assessing investor profits and losses.
Currently, Cardano’s 30-day MVRV is at 11%, indicating that many investors are in profit. This profitability often leads to selling pressure as investors try to lock in profits, which can cause a price correction.
Historically, Cardano has tended to correct when the MVRV ratio is between 10% and 20%, a range known as the ‘danger zone.’ When the ratio reaches this level, it suggests that the market may be overheating and a price correction is likely.
Read more: How to buy Cardano (ADA) and everything you need to know
While this signal has only emerged within the last 48 hours, a small group of investors has been practicing this for some time now: whale addresses have been selling for the past month, and while not strictly, this trend has continued despite the recent price rally.
Addresses holding between 1 and 10 million ADA have sold over 120 million ADA, worth over $52.6 million. They initially sold to offset losses, but now appear to be selling only to lock in profits. heyThis will have a negative impact on the price of Cardano.
ADA Price Prediction: Time to Test Support
Cardano price has surged 27% in a week but may face resistance before continuing its upward climb. ADA, which is trading at $0.44 at the time of writing, may next test the support at $0.42.
The aforementioned factors indicate a bearish picture, suggesting that a drop below this price is likely. A potential drop could see the crypto asset drop to $0.40, wiping out half of the recent gains.
Read more: Cardano (ADA) Price Prediction 2024/2025/2030
However, if ADA can bounce off $0.42, it will find support to continue its rise. Reclaiming $0.45 as a support floor can propel the rally further, while a test of $0.46 as resistance will invalidate the bearish thesis.
Disclaimer
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