Since the end of last week, the altcoin Cardano has been retreating. During this time, it has lost over 6% in value, but is still holding in the top 10 digital currencies.
The pressure has intensified due to the activation of whale wallets holding more than 1 million ADA. The cohort of major investors has started to take profits around $0.92.
As a result, the crypto has failed to reach the psychological level of $1. This barrier is unlikely to be overcome in the near future considering that the sentiment among traders is dominated by a wait-and-see attitude.
On the exchange MEXC , the ADA price has dropped 2.86% in the last 24 hours to 0.8167 USDT. At the end of August, the local peak for the coin was $0.959, and at the beginning of September, it fell to $0.783.
This week, ADA was able to rise above $0.80 and is trying to make this level fundamental. If a strong support zone forms here, it could become a starting point for a new crypto rally.
1. ADA whale reserves have fallen to nearly a monthly minimum
Whales have been selling Cardano since the end of August, and since then, the crypto has been losing ground in the spot market.
The coin found a bottom at $0.78 on the MEXC exchange at the very beginning of September. The relative strength index (RSI) dropped into the oversold zone after such a significant fall of the coin.
Then ADA was able to improve its position with a spike above $0.80, however, the pressure remains, and a trend change is unlikely in the coming days.
The rally has fizzled out due to the activation of large holders of digital currency. Addresses with a balance of 1 million to 10 million coins triggered a sell-off at the moment when Cardano was testing values around $0.92.
Over the past seven days whales sold about 30 million ADA. As a result, their reserves decreased to 5.57 billion ADA – the lowest level since mid-August (according to Santiment).
The whale movement triggered a cryptocurrency decline. However, its quick bounce back above $0.80 indicates that most traders in the current cycle are not interested in a long-term retreat. Holding positions at this level creates conditions for establishing a strong support zone for the cryptocurrency.
But a negative scenario cannot be ruled out, in which the altcoin could fall to $0.57-0.51. A prolonged bearish trend will return to the market if Cardano fails to hold above $0.70 as a result of a new sell-off.
The perpetual swap rate on MEXC is still positive, despite the total interest in Cardano futures decreasing by 2.34% to $691.4 million over the past 24 hours. (according to Coinalyze).
The weakening interest in the futures market indicates a change in traders’ tactics, who have decided to take a break after aggressive selling at the turn of August-September.
2. Negativity on social media accelerated the achievement of a local bottom.
Social media serves as one of the main benchmarks for traders to assess the situation in the cryptocurrency market.
When most posts on Telegram, X, Reddit, and 4Chat contain negative forecasts, it is usually a sign that the digital currency has already found its bottom. After a short consolidation, the asset begins to regain ground and may even show aggressive growth.
If, on the contrary, positive sentiments dominate on social networks, and users expect a new surge in crypto, then a quick correction should be anticipated, as the coin reaches a local peak during the hype. Afterwards, it falls due to selling amid profit-taking.
In August, against the backdrop of Cardano’s leap above $0.90, users focused on a bullish scenario became active on social media. As a result, the altcoin started to retreat.
However, by the end of last month, users reacted negatively to the decline of ADA, reports Santiment.
The change in the Cardano exchange rate on the MEXC platform over the past few weeks can be compared to the shift in sentiments on social media. Negativity was at its peak for five months, but after that, the ADA rate strengthened by about 5%.
Those traders who did not succumb to panic and did not sell their crypto found themselves in a winning position. By the end of the current week, the altcoin began to gradually strengthen, its rate exceeded $0.82 and is now trying to overcome the resistance that will intensify as it approaches the psychological mark of $0.90, analysts note.
3. Institutions could help Cardano soar to $1.5
Users of the popular betting platform Polymarket are anticipating the launch of Cardano-ETF spot crypto funds in the USA.
The likelihood of such an instrument appearing in the American stock market in 2025 is estimated at 87%. Earlier this year, the chances of launching an ETF for Cardano were only 21%.
Bloomberg strategists believe that the probability of approval for the ETF issuance application for Cardano is 75%.
The investment company Grayscale submitted an application in August . for the launch of an altcoin-focused trust in the state of Delaware. According to experts, the financial giant has taken the first step towards deploying a spot crypto ETF.
It then submitted an S-1 application to the Securities and Exchange Commission (SEC). The regulator is unlikely to decide on a quick legalization of the new instrument. Most likely, it will take a pause, but by the end of 2025 or early next year, a Cardano ETF could appear on the US stock market.
The issuance of a spot crypto fund will accelerate institutional adoption of digital currency. Major capital has gained a channel to test its capabilities.
Increased support for ADA from investment companies will create conditions for a new rally. In the medium term, the coin may stabilize above $1.5, and such a trend is indicated by improvements in its technical and fundamental indicators.
Let us remind you that Cardano reached its historical maximum in early September 2021. The crypto hit $3.10, and is currently trading almost 73% below that level, but still holds a position in the top 10 digital currencies.
Disclaimer: This information is not investment, tax, legal, financial, accounting, consulting, or any other related service advice, nor is it advice for the purchase, sale, or holding of any assets. MEXC Training provides information solely for reference purposes and is not investment advice. Please ensure that you fully understand all risks and exercise caution when investing. The platform is not responsible for users’ investment decisions.
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