Cardano Whales Are Buying The Dip, But Is The Upswing To $1 Viable?

    • Due to the inconsistency in the number of active addresses, ADA’s uptrend to $1 may remain in lockstep.
    • If the bear flag pattern confirms, Cardano may correct to retest $0.435 and $0.4 support areas.

    Cardano made a brief rally to $0.545 after plunging to $0.435. The uptick came as a reaction to the Federal Reserve’s latest hike in interest rate (the highest since 1994). Although a few altcoins joined ADA in the upswing, recovery might have to wait as investors adjust to the impact of the Fed’s move.

    At the time of writing, Cardano’s price had corrected to $0.48 with the down leg likely to touch the lower boundary of the governing chart pattern. For now, the biggest task for the bulls was to ensure the $0.5-level and the middle boundary of the bear flag pattern are reclaimed.

    Why Cardano Is Sending Mixed Signals

    The Moving Average Convergence Divergence (MACD) currently has a vivid bullish signal that came into play with the 12 Exponential Moving Average (EMA) lifting above the 26-day EMA. Bullish histograms lining above the mean line also emphasize the presence of the bulls in the market. However, the short-term trend may only flip positively if the MACD completes the mission by flipping above the mean line into the positive territory.

    On the other hand, the presence of a bear flag pattern (in the making) on the four-hour chart suggested that any recovery may be short-lived with ADA forced to stretch the bearish leg. A break below the lower boundary of the flag validates the downtrend. Two key areas are expected to cushion Cardano’s price from falling into a bottomless pit at $0.435 and $0.4.

    ADA/USD Four-Hour Chart

    Cardano Whales Increase Activity Buying The Dip But Is The Upswing To $1 Viable?
    Tradingview chart

    According to on-chain data from Santiment, whale activity within the Cardano ecosystem has been improving even as the prices dropped. The chart below sheds light on the holders with tokens between 1 million and 10 million, who currently account for 17.87% of the total supply. This is up from a 30-day low of 17.44% recorded on June 1.

    Cardano Supply Distribution

    Cardano Whales Increase Activity Buying The Dip But Is The Upswing To $1 Viable?
    Santiment chart

    At the same time, the same 30-day period showed frequent spikes in the number of 24-hour active ADA addresses. These swings often give Cardano the momentum to sustain the uptrend, however, due to their recent erratic nature and lack of trust from holders, consistency has become difficult to achieve.

    ADA Active Addresses

    Cardano Whales Increase Activity Buying The Dip But Is The Upswing To $1 Viable?
    Santiment chart

    At the moment, 77,100 addresses are interacting on the Cardano protocol after the metric plunged to roughly 60,000 at the beginning of the week. Overhead pressure was bound to mount on ADA as long as the number of active interactions failed to assume a consistent uptrend. This also casts doubt on whether ADA can close the gap to $1 in the near term.

    John Isige
    John is a cryptocurrency technical analyst, who looks at micro, macro and fundamental factors affecting market trends.

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