Cardano (ADA) Under Pressure After Massive Sell-Off by Whales

Cardano [ADA] price dropped sharply on 28 February after a massive sell-off by large holders, or whales. Over the past 48 hours, these whales sold over 70 million ADA, pushing the price down. At the time of writing, ADA was priced at $0.9071, showing a 4% decrease in the past 24 hours. As the price continues to fall, many are wondering if Cardano can hold its key support level or if the price will drop further.

Here's a closer look at how the whale sell-off impacted several key metrics for ADA.

As mentioned earlier, the large-scale selling of ADA by whales often leads to lower prices. This sell-off caused ADA's market cap to decrease by 6.08%, bringing it down to $32.87 billion.

Another important metric, called the Stock-to-Flow (S2F) ratio, dropped from 291.37 to 288.50. This ratio is used to measure the scarcity of an asset, and the decrease indicates a decline in investor confidence in the token.

Furthermore, traders in the derivatives market also showed decreasing optimism. For instance, Binance's Funding Rate, which measures the amount traders are willing to pay to maintain positions, fell from 0.01% to 0.0055%. Similarly, on DYDX, the Funding Rate also dropped, moving from 0.000334 to 0.000057.

Lastly, a metric called the MVRV Ratio, which indicates whether holders are experiencing profit or loss, also decreased from 0.92 to 0.769. This ratio shows that as the price continues to fall, a large number of ADA holders are facing losses.

To summarize, the whale sell-off had a significant impact on several key metrics for ADA, pushing the price down and indicating a loss in investor confidence and optimism. As the price approaches a crucial support level, the next steps will be critical in determining ADA's future trajectory.

Can Cardano ADA Bounce Back?

As the price of ADA continues to fall, it approaches a crucial support level of $0.8335. This price point becomes highly significant as it could potentially prevent ADA from dropping further. If a sufficient number of buyers emerge at this level, the price may experience a bounce-back. However, if ADA drops below this support, the price could continue to fall to lower levels.

For ADA to experience a recovery, several crucial developments are necessary. First and foremost, the whale sell-off needs to cease, allowing the selling pressure to subside. Once this occurs, new buyers must step in and show an interest in purchasing ADA at lower prices. Without these changes, a rapid recovery may be unlikely.

VR Soldier Thoughts

As the VR Soldiers, we observe Cardano's situation at a critical juncture. The whale sell-off has created substantial selling pressure, but it also presents an opportunity for new buyers to enter at lower price points. If ADA manages to hold above the key support level of $0.8335, it could potentially regain investor confidence and begin a price recovery. However, the bearish momentum and lack of strong buying interest make this path challenging.

For now, caution is paramount as the market searches for signs of stability. We always emphasize the importance of conducting thorough research and making decisions that align with your own analysis and risk tolerance. This serves as a friendly reminder that the information provided here is not intended as financial advice.