Cardano’s Latest Price Action Sparks Optimism Among Investors
For some, Cardano’s dip below $1 might seem alarming, but recent on-chain data hints at a strong bullish sentiment that could lead to a significant price rebound.
As of now, Cardano (ADA) trades at $0.98, following a retreat from its recent high of $1.15. This drop coincides with a broader market decline, including Bitcoin (BTC) slipping below $95,000 yesterday.
Data from Coinglass highlights a critical trend: the ADA Spot Inflow/Outflow metric reflects a -$40 million outflow, an improvement from -$63 million recorded on November 25. This means ADA bulls have removed approximately $100 million from exchanges in two days.
What Does This Mean for ADA?
When tokens are pulled from exchanges, it generally signals that holders are not planning to sell, reducing sell pressure and potentially driving prices up. Conversely, higher inflows would indicate sell readiness, exerting downward pressure on prices.
Moreover, Cardano’s 90-day Mean Dollar Invested Age (MDIA) has declined significantly. MDIA measures the average age of held tokens by purchase price. A decline often suggests renewed activity for previously dormant tokens. This increased trading activity, paired with rising demand, could facilitate ADA’s upward momentum.
Bullish Patterns Support ADA’s Uptrend
On the 4-hour chart, ADA is forming a bull flag, a pattern often associated with further upward movements. The flagpole reflects strong buying pressure, while the flag represents a consolidation phase. A breakout from this pattern typically resumes the bullish trend.
If bulls push ADA above $1.15, the next target could be $2, reflecting a potential surge. However, increased selling pressure might drag the price to $0.85 instead.
What Lies Ahead for Cardano?
Cardano’s price trajectory will largely depend on buying pressure and market sentiment. The withdrawal of $100 million from exchanges underscores investor confidence, setting the stage for a potential rally if positive trends persist.
