Cardano Price Drops Below 80 Cents Amid Increased Whale Activity
Amid the cryptocurrency market correction due to Bitcoin's price drop below $94K, Cardano's price has also declined. The altcoin, valued at approximately $38.9 billion with a 24-hour trading volume of about $832 million, fell over 30 percent in three weeks, trading around 87 cents on December 30.
Technical Analysis
From a technical perspective, Cardano has been forming a megaphone bullish structure since mid-December 2023. A recent rally towards $1.3 invalidated the dominant correction that began in mid-March 2024. In the weekly timeframe, Cardano consistently closed above the 50 Moving Average (MA), and its weekly Relative Strength Index (RSI) exceeded 80 percent for the first time since Q3 2023.
However, in the daily timeframe, a potential head and shoulders (H&S) reversal pattern is emerging, accompanied by bearish divergence on the RSI. With consistent closures below the 50-day MA, Cardano is positioned to potentially drop below 80 cents, targeting support between 68 cents and 77 cents.
#Cardano $ADA most significant support zone is between $0.77 and $0.68! pic.twitter.com/ARRtHdzWoY
— Ali (@ali_charts) December 30, 2024
Cardano Fundamentals
Following Donald Trump's re-election, Cardano has benefited significantly. Trump plans to engage with the cryptocurrency sector to boost the US economy during his upcoming term. Charles Hoskinson, Cardano's founder, has actively promoted ADA adoption and seeks expansion into Argentina alongside President Javier Milei.
The Cardano network has established itself as a notable layer one (L1) blockchain, with over $433 million in total value locked (TVL) and a stablecoin market cap exceeding $22 million. The implementation of decentralized governance via the Chang Hard fork has enhanced confidence in ADA’s DeFi ecosystem, supported by institutional investors.
On-chain analysis from Santiment indicates that Cardano whales, holding between 1 million and 10 million coins, purchased over 20 million ADA in two days, now possessing nearly 6 billion ADA tokens. Additionally, close to 22 billion ADA coins are staked to secure the network, leading to a gradual decrease in overall supply, which is bullish for long-term prospects.