Cardano Sees Price Surge and Profit-Taking Activity
Cardano has experienced a significant price surge of over 10%, breaking through a key resistance level and testing higher prices. Despite this bullish momentum, on-chain data indicates that long-term holders are starting to take profits. The ratio of daily on-chain transactions in profit to loss has turned positive, suggesting that many investors are cashing in on recent gains.
Market Sentiment and Profit-Taking
As the market dynamics evolve, ADA is striving to maintain its upward trend, fueled by positive sentiment and growing optimism for further price recovery. However, the recent profit-taking activity signifies that some investors are cautiously securing their profits, potentially leading to short-term price fluctuations.
With high expectations for a sustained rally in the coming weeks, investors are closely monitoring ADA’s performance to see if it can uphold its momentum. The next few days will be critical in confirming whether Cardano can hold above current levels and aim for new highs.
Long-Term Holders Selling ADA
Cardano is currently testing local supply levels following a substantial surge, prompting investors to adopt a more cautious approach in their short-term strategies.
Recent data reveals that the ratio of daily on-chain transactions in profit to loss for ADA reached 1.53, indicating that for every transaction resulting in a loss, 1.53 transactions have yielded profits. This trend suggests that many investors are leveraging the recent price increases, leading to some long-term holders selling their coins for profit.
Additional data from Santiment shows a slight decline in Cardano’s Mean Coin Age and Mean Dollar Invested Age on September 11. These metrics reflect the behavior of long-term holders, indicating that investors who acquired ADA at lower prices are now capitalizing on profits, thereby reducing the average age of the coins in circulation.
Price Action and Future Outlook
Despite the selling pressure from long-term holders, ADA still holds the potential to sustain its bullish momentum if market conditions remain favorable. While Cardano could aim for higher prices, the cautious stance of seasoned investors implies that the upward trend may encounter resistance in the near future.
Currently trading at $0.3565 after testing a crucial resistance level at $0.36, ADA has managed to close above the 4-hour 200 exponential moving average (EMA) at $0.3490. This successful breach of the 4H 200 EMA, a key resistance since early August, signifies short-term strength and is vital for maintaining the uptrend.
If ADA can retest and uphold this EMA level as support, it would confirm a short-term bullish trend, potentially paving the way for further upward movement. Analysts and investors are eyeing the $0.38 to $0.40 range as the next target for ADA.
However, a failure to sustain this support level could lead to a price retreat to lower demand zones, potentially dropping to around $0.33. This scenario would indicate a weakening momentum and could trigger additional selling pressure.
Overall, the coming days will be pivotal for ADA as it navigates these critical price levels to determine its future trajectory in the market.
Featured image from Dall-E, chart from TradingView
