- Cardano (ADA) has failed to reclaim $0.5 as support, despite on-chain metrics suggesting network accumulation.
- Whale accumulation and social sentiment remain subdued compared to the 2020 rally, casting doubt on a swift price recovery.
Cardano (ADA) has been locked in a battle around the crucial $0.5 price point, raising questions about the sustainability of its recent gains. While on-chain metrics hint at some accumulation across the network, the absence of significant whale buying and negative social sentiment poses challenges for a swift breakout.
Stalemate at $0.5:
ADA attempted to climb above $0.5, a key resistance zone that previously turned into support after a price drop in late April. However, similar to the previous attempt, the price fell back below this level, currently trading at $0.482. This repeated rejection highlights the significance of $0.5 as a psychological barrier for ADA.
On-Chain Accumulation: A Mixed Signal:
Looking at on-chain metrics, there are signs of token accumulation across the Cardano network. The supply distribution shows a decline in holdings by wallets containing between 1,000 and 100,000 ADA since November 2023, suggesting these investors might be accumulating larger bags elsewhere.
However, the growth in holdings for wallets containing between 10 million and 100 million ADA, which typically represent whales, is significantly lower compared to the 2020–2021 rally. This lack of enthusiastic accumulation from whales weakens the bullish case for ADA.
Social Sentiment Dampens Optimism:
Social media paints a similar picture. The volume of conversations surrounding Cardano has been declining for over two months, indicating waning interest. Additionally, the weighted social sentiment for ADA has been predominantly negative since March, reflecting investor pessimism.
Liquidation Levels: A Glimmer of Hope?
While the short-term outlook appears challenging, liquidation levels offer a potential ray of hope for ADA bulls. Analysis of liquidations over the past month reveals that $0.5 was a zone of significant short positions. The recent price rejection likely triggered liquidations of these shorts, potentially creating a temporary hurdle.
This suggests that a period of consolidation around $0.477 might be necessary before ADA can attempt another assault on $0.525. Such consolidation could allow new short positions to build up, providing additional fuel for a future breakout.
The Verdict:
Cardano’s battle at $0.5 highlights the importance of this level for the token’s near-term price trajectory. While on-chain metrics suggest some accumulation, the lack of whale participation and negative social sentiment create headwinds. However, the liquidation levels offer a possibility of consolidation before a renewed attempt to break above $0.5. The bulls will need to overcome these hurdles and revive positive sentiment to propel ADA toward a sustained price recovery.