Analysis

ADA is under significant buying pressure

Investors appear to be accumulating ADA at low prices. On-chain data shows buying pressure at an all-time high, while price build-up solid support could ward off further losses.

Source: Trade View

ADA looks bullish above $1

ADA appears to be gathering bullish pressure for a breakout.

Cardano’s token has seen a sharp decline since hitting an all-time high of $3.16 on September 2, 2021. The market value of the smart contract blockchain fell nearly 71% on an increase in profit-taking.

However, investors on the sidelines now seem to be using the price drop to accumulate tokens.

On-chain data from Santiment shows that the number of addresses with between 10,000 and 1 million ADA has increased by 15,000% since December 15, 2021. Since then, around 3,900 large wallets have been created, indicating an increase in interest from retail investors.

Source: Santiment

A significant increase in the number of buy orders helped the price create a stable retaining wall. IntoTheBlock’s In/Out of the Money Around Price (IOMAP) model shows that more than 340,000 addresses previously purchased 7.65 billion ADA for around $1.

The demand zone could provide enough strength to absorb any increase in selling pressure and allow the price to recover towards $1.2 or even $1.6.

In/Out of the money at the price | Source: IntoTheBlock

While the odds are in the bulls’ favor, any major move hinges on the $1 support. A crucial daily close below this level will cause panic in the market and prompt investors to reduce the size of their positions. In such cases, ADA could capitulate at $0.66 and mark the end of the downtrend.

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Annie

Championing positive change through finance, I've dedicated over eight years to sustainability and environmental journalism. My passion lies in uncovering companies that make a real difference in the world and guiding investors towards them. My expertise lies in navigating the world of sustainable investing, analyzing ESG (Environmental, Social, and Governance) criteria, and exploring the exciting field of impact investing. "Invest in a better future," I often say. That's the driving force behind my work at Coincu – to empower readers with knowledge and insights to make investment decisions that create a positive impact.

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