Key Insights:
- Large investors are accumulating ADA between $0.32 and $0.35 despite the recent dip in Cardano price.
- Technical patterns are showing a falling wedge that could lead to a massive breakout if resistance breaks.
- Historical data indicate that February is usually a tough month for Cardano (ADA) price.
Cardano (ADA) price is trading near $0.32 at the time of writing, which serves as a major line in the sand for buyers.
This ADA price point stands as the bottom of a recent range, and after a 7% slide over the last 24 hours, the market is watching to see if this floor holds.
Why the Cardano Price Is Facing Heavy Pressure?
Cardano price recently slid from a daily high of $0.35 to $0.32. This ADA price drop pushed the market cap to roughly $11.9 billion, and interestingly, trading volume spiked during this descent to around $715 million.
This indicates that the sell-off had some force behind it. Meanwhile, the Cardano (ADA) price sits at the 12th spot in the global crypto rankings.
According to the daily charts, ADA price seems to be stuck inside a descending channel, which means that buyers have been on the sidelines.
Meanwhile, the Cardano price is currently well below the 200-day EMA, which sits near $0.41 (which is still a distant target for now). With this being said, for the trend to change, the token must first reclaim the $0.33 or $0.35 level.
Large Investors Show Interest in Cardano Price Below $0.35
Even with a weak price chart, on-chain data is showing a different narrative. Whales have been busy during this pullback, clustering buy orders between $0.34 and $0.35.
This shows that while retail traders might be nervous, larger players see value at these levels.
Exchange data also supports this idea of accumulation. More tokens are moving off exchanges and into private wallets, which usually happens when investors plan to hold for the long haul rather than sell quickly.
There has also been heavy stake participation in recent times, and by locking up a huge percentage of the supply in circulation, these participants help lower the total number of ADA that can be sold on the open market.
ADA Price to Rally?
The two-day chart shows that Cardano price is also trading within a falling wedge pattern, which has been forming since late October. This tends to happen when the ADA price moves narrowly into a tight point.
Often, this is a sign that selling power is running out, and if Cardano price can break above the top line of this wedge, analysts believe a massive move could be inbound.
Historically, a falling wedge of this kind tends to end up in a possible price increase of around 90%.
To trigger this, Cardano price needs to close above $0.54. Before that can happen, it also needs to clear smaller hurdles at $0.37 and $0.43, where many short sellers have placed their bets.
The Ghost of Februaries
When predicting crypto prices, history turns out to be one of the most powerful tools. Data from CryptoRank shows that February is traditionally a bad month for Cardano, with a median return for February around -9.50%.
This creates a tug-of-war between the improving chart structure and the seasonal trend, and despite January looking to end with a 5% gain, that momentum is already starting to fade.
The Chaikin Money Flow (CMF) has also been rising since early January, but it is still below the zero line. This means that while things are getting better, the bears still have the upper hand.