ADA is finally showing its strength after being one of the most sold-off cryptocurrencies since September last year. Most of the top cryptocurrencies achieved new 2022 lows in the last few days courtesy of yet another major weekly crash. ADA was among the few that managed to hold on to its structural support levels.
ADA’s price crashed from a weekly high of $0.669 to a weekly low of $0.435. It has recovered slightly since then and it traded at $0.495 at press time. This recovery came after ADA retested support near the $0.448 price level. Notably, higher than the $0.39 low that it achieved during the May crash.
Confirmed buy wall?
ADA’s current support suggests that there is buying pressure supporting the current reversal. The price action suggests that there is a buy wall preventing further downside near the support line. The price also registered a strong upside the last time that it retested the same level in May.
Source: TradingView
ADA did not manage to enter into oversold territory according to the RSI, despite significant downside in the last few days. The RSI dropped to 37 before reversing slightly and its MFI also registered significant outflows.
However, the MFI’s lowest level was 43, and this confirms that ADA investors are still holding on to their coins, especially after strong accumulation near current support.
Source; TradingView
On-chain metrics
ADA’s market cap metric confirmed that the price bottomed out on 13 June courtesy of the uptick it experienced in the last few hours. It previously registered a significant downside as prices crashed.
The uptick is a sign that ADA investors are buying the dip. This was confirmed by a strong uptick in the whale transaction count for transactions over $1 million.
Source: Santiment
ADA’s supply distribution metrics also confirmed that whales have been accumulating after the crash. Supply distribution by a number of addresses showed an increase in addresses holding from 1,000 coins to more than 10 million coins. Interestingly, ADA addresses have increased significantly in the last 24 hours.
Source: Santiment
ADA’s latest price action suggests that it might experience a strong recovery, especially after the latest crash. However, this will mainly depend on whether the overall crypto market will recover from the recent crash.
Source: https://ambcrypto.com/decoding-why-adas-structural-support-is-holding-strong-despite-headwinds/