Even As Whales Offload ADA, Cardano Could See Huge Price Boost If This Happens
Cardano (ADA), like the rest of the crypto market, has traded with massive volatility in 2022. However, a Santiment analyst has noted several indicators to look out for in the market, including a metric to watch for that could give ADA a strong chance of price reversal.
This metric is the ‘Fixed Range Volume Profile’ the analyst wrote in an Insight post on the crypto market intelligence platform. The technical indicator shows some ADA volume gaps, significantly around $0.19 to $0.24 price levels on the ADA/USDT trading pair on Binance.
He opined that the metric is important to monitor because volume gaps occur because traders do not get a chance to test those levels enough. If the price returns to those levels and they get filled, it could be the springboard to launch a reversal as new money may enter the market.
“The reason why volume gaps are important is due to the fact that many traders didn’t chase price after those levels weren’t retested enough. This means that new blood may enter once the gaps are filled and increase chances of reversal,” the analyst posited.
The analysis further highlighted other factors that have played a role in the price trend of ADA. One of these is that shark and whale-level holders have been offloading their tokens.
This cohort of investors who hold between 100k to 1m ADA tokens have sold off 600 million ADA since May and are still actively trading for any change in direction. Similarly, the ADA market has also been experiencing capitulation events similar to the capitulation of 2020 going by the Network Realized Profit/Loss (NRPL) divided by actual price metric, the analyst noted.
ADA Maintains price level
On the bullish side of things, Santiment data indicates that ADA has remained highly popular among investors as it has not “seen any hate and/or indifference” going by the Social Volume metric.
In the market presently, the price of ADA is staging a price recovery that has seen it maintain the $0.3 price level. The proliferation is coming after shockwaves from revelations that FTX and Alameda Research were insolvent dragged the crypto market to multi-year lows.