Cardano Whales Shed $69 Million ADA Ahead of This Week’s Token Unlock

by

As a seasoned crypto investor with battle-scarred fingers from riding the rollercoaster that is the cryptocurrency market, I can’t help but feel a mix of anticipation and trepidation as I watch Cardano (ADA) whales selling off their tokens ahead of the upcoming token unlock. With my own hard-earned ADA stashed away in my digital wallet, I can’t help but wonder if this sell-off will draw the price down further, or if it’s just a temporary blip on the radar before another bullish run.

Large investors, or ‘whales,’ who significantly contributed to the surge in Cardano‘s (ADA) price by approximately 270% over the past month, have recently decided to offload some of their tokens. This selling spree precedes this week’s token unlock, an event that market players anticipate could bring price fluctuations due to increased supply.

As of this writing, ADA trades at $1.23. Will this sell-off draw the price down further?

Cardano Key Holders Offload Some Tokens

On Monday, December 2nd, there was a significant increase in large Cardano holders purchasing ADA, as shown by a netflow of 63.58 million ADA. This trend suggests that ‘whales’ are buying more than they’re selling. The netflow measure monitors the gap between tokens these key players buy and sell. An upward trend in netflow implies accumulation, meaning they’re buying more, while a decrease indicates they’re offloading their holdings.

Currently, IntoTheBlock reports that the total amount of ADA held by whales (large investors) has dropped significantly to approximately 7.62 million ADA. This decline indicates that these large holders have transferred around 55.96 million ADA out of their portfolios, possibly for profit-taking or portfolio rebalancing purposes. At present Cardano prices, this sale equates to a substantial $69 million in value.

According to BeInCrypto’s analysis, it appears that the recent drop in prices could potentially be linked to the scheduled token release on December 6.

Transactions that make locked tokens available for trading, thereby changing the balance between supply and demand, frequently cause substantial price fluctuations due to their impact on token availability.

As per Tokenomist (previously known as Token Unlocks), it’s expected that Cardano will distribute approximately 18.53 million ADA tokens on a specific date, with a total value of around $22.79 million. This potential influx could cause price fluctuations, potentially making it challenging for the altcoin to maintain an upward trend during this timeframe due to the market volatility it may introduce.

ADA Price Prediction: Overbought, Retracement Likely

On a day-to-day graph, the Bollinger Bands for Cardano suggest increased price fluctuations, due to their expansion. These bands further help identify if an asset is being heavily bought (overbought) or sold (oversold).

When the price reaches the top limit (upper band), it suggests a situation where the asset is overvalued or overbought. Conversely, when the price touches the bottom limit (lower band), it implies the asset is undervalued or oversold. In this context, the image below supports the argument that ADA is currently overbought.

The Relative Strength Index (RSI), a tool that gauges momentum, tends to match market trends or bias. When the RSI value surpasses 70.00, it indicates an overbought situation. Conversely, if the RSI value falls below 30.00, it suggests that the asset is oversold.

Currently, the Relative Strength Index (RSI) for Cardano is 82.15, indicating that ADA has moved into an overbought state. As a result, there’s a possibility of a correction in price, which might take it down to around $0.92. But if significant Cardano investors or ‘whales’ decide to buy more (resume accumulation), the trend could reverse, potentially causing the price to surge past $1.33.

Read More

2024-12-04 09:53