Cardano [ADA] has stayed in a massive drawdown even after rebounding from the lows around $0.30. That said, key data show that Cardano could be shaping up for a rally as accumulation signals intensify.
Whale’s purchase sparks volume surge
As per data from Onchain Lens, whales were back to buying ADA alongside other cryptos like Ethereum [ETH]. This was after a deposit of $7.9 million USDC into the Hyperliquid exchange.
The two wallets belonging to the same whale went long on ADA at an average price of $0.38, placing over 10 orders. The whale bought 6.46 million ADA for a position worth about $2.50 million.
The activity indicated accumulation of the informed money, which hinted that prices could be gearing up for a rally.
On that note, the result was a spike in daily trading volume, which surpassed $600 million at press time. The altcoin was up less than 1% on the same time scale despite this spike.
Why is now the time to accumulate?
Further data analysis indicated that this was the right time to accumulate, which aligned with the observed whale activity. ADA’s short-term bubble risk was at 0.659, which was bearish. This meant that the Cardano price was undervalued.
Usually, when cryptos are oversold, it’s time to load them up more. Historical data showed price bounces followed these bearish conditions, as they represented lows in different seasons.
Additionally, the drawdown from its ATH was at 86%. This further ascertained the oversold threshold, which is often a reversal signal for most financial markets.
The data indicated that now could be the time to scoop up ADA, anticipating price appreciation. But does the price action of the altcoin support this expectation?
Has ADA’s price passed the test?
Cardano’s price was testing the support level at $0.38 and seemed to have managed to hold above it. This support level had previously acted as resistance and now aligns with the whale’s buying price.
The chart indicates that the price is moving toward the upper resistance at $0.43, likely driven by whale activity and gradually improving market sentiment.
The consolidation above the aforementioned support level further proved that the accumulation process was ongoing.
However, buyers needed to hold onto this momentum to challenge the resistance at $0.43. A successful breach would shift the market structure toward bullishness.
A breakdown below $0.38 remains possible and would shake out weak hands, invalidating the current outlook.
Overall, ADA presents strong accumulation scenarios, but confirmations are still required; for example, broader market alignment would strengthen the case.
Final Thoughts
- Cardano whales are back to accumulation as the altcoin is undervalued.
- Cardano price was holding above a key support level, which could push the price toward $0.43 or higher.
