A Bearish Reversal Pattern Emerges for Cardano (ADA) Price
The Cardano (ADA) price is currently showing signs of a bearish reversal pattern, indicating the possibility of a larger correction for the altcoin. However, despite this bearish sentiment, there may still be opportunities for investors to accumulate ADA.
Whales Are Pulling Back
Whales, who are large holders of ADA, play a significant role in influencing cryptocurrency prices. In the case of Cardano, these whales have a dominant impact on daily transaction volume. While they hold less than 20% of the circulating supply, their transactions accounted for about $17.4 billion out of the $17.7 billion traded in the last 24 hours.
However, recent data shows that whales have been reducing their transactions. Five days ago, they moved around $23 billion worth of ADA across addresses, but this has decreased to $17.4 billion. This decline in whale activity suggests a decrease in bullishness and may negatively affect the price action of ADA.
ADA Price Prediction: Major Corrections Are on the Way
Currently trading at $0.618, Cardanoโs price has experienced a 6% correction and lost support at $0.619. On the daily chart, a double-top pattern is forming, with $0.619 serving as the breakout point.
The double-top pattern is considered a bearish reversal pattern in technical analysis. It consists of two consecutive peaks at similar price levels and indicates a potential trend reversal from bullish to bearish. This pattern suggests a loss of momentum among buyers, often followed by a downward price movement.
Based on this pattern, the target price for the bearish reversal is set at $0.455, which is approximately 26% below the breakout point.
Good Opportunity for Investors
Although the forecast for ADA is bearish, the current drawdown in price presents an optimal environment for accumulation. The Market Value to Realized Value (MVRV) ratio indicates that ADA is in the opportunity zone.
The MVRV ratio compares the current market capitalization to the realized cap of a cryptocurrency. It helps determine whether a cryptocurrency is overvalued or undervalued relative to its historical price. With a 30-day MVRV of -13.45%, investors who bought ADA in the past month are currently experiencing losses of 13.45%.
Furthermore, historical data shows that when the MVRV ratio falls within the opportunity zone (between -8% and -18%), it often leads to price reversals. This makes it an ideal time for ADA accumulation.
By accumulating ADA during this period, investors may trigger a bullish reversal, potentially invalidating the bearish thesis and preventing a decline below $0.580.
A Hot Take: Opportunities Amidst Bearish Patterns
Despite the emergence of a bearish reversal pattern and a decrease in whale activity, there are still opportunities for investors in Cardano (ADA). Hereโs what you need to know:
- Whales are pulling back: The decrease in whale transactions indicates waning bullishness and may impact ADAโs price action.
- Bearish reversal pattern: The double-top pattern suggests a potential trend reversal from bullish to bearish, with a target price of $0.455.
- Good opportunity for investors: The current drawdown in ADAโs price presents an optimal environment for accumulation, as indicated by the MVRV ratio.
As an investor, itโs essential to stay informed about market trends and patterns. While the bearish signals may suggest a potential decline in ADAโs price, there are still opportunities to accumulate
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