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Cardano Bloodbath? Sell-Off Raises Fears Of ADA Price Drop

Cardano Bloodbath? Sell-Off Raises Fears Of ADA Price Drop

Cardano (ADA), the smart contracts platform aiming to dethrone Ethereum, is facing a balancing act. While the token has seen a recent price increase, a potential exodus by major investors casts a shadow of doubt.

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Will Whales Drag ADA Down?

On-chain data reveals a cause for concern for Cardano bulls. Addresses holding a significant amount of ADA (between 1 million and 1 billion tokens) have been selling their holdings. This behavior by “whales,” as these large investors are known, can be a bearish indicator, suggesting a loss of confidence in the project’s future. Historically, such selloffs have often preceded price dips.

While some might view low volatility as a sign of stability, in ADA’s case, it might be hindering growth. The token’s current low volatility acts like a force field, keeping price swings in check. This can be positive, preventing sharp drops. However, it also restricts upward momentum and makes significant price increases less likely.

Source: Santiment

Consolidation Or Correction?

Two potential scenarios for ADA’s price have been observed. If selling pressure by whales intensifies, ADA could fall back to its previous support level between $0.42 and $0.44. This consolidation phase would represent a pause in the token’s upward trajectory.

However, a more concerning possibility exists. A significant increase in selling could trigger a correction, pushing the price down to $0.42 or even lower. This scenario would be a setback for ADA bulls, potentially erasing recent gains.

ADA market cap currently at $15.7 billion. Chart:

Cardano Bulls Look For A Lifeline

Despite the bearish undercurrents, there are reasons for cautious optimism. First, ADA has defied the selling pressure from whales with a nearly 5% price increase in the last week. This resilience suggests there might still be enough buying pressure to offset the selling.

ADA price action in the last 24 hours. Source: CoinMarketCap

Second, some Cardano price predictions remain bullish. Sources anticipate a rise to $0.46 by July 8th. Whether this prediction materializes depends on market forces, but it offers a potential silver lining for investors.

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The Fear & Greed Index

Adding another layer to the complex situation is the current market sentiment. The Fear & Greed Index, a measure of investor sentiment across the cryptocurrency market, currently sits at 72, indicating “Greed.”

This overall…

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