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Cardano has surged more than 10%, breaking a major resistance level and is now testing higher prices. Despite the bullish momentum, on-chain data reveals that long-term holders of the coin are starting to take profits. The daily on-chain profit-to-loss ratio has turned positive, suggesting that many investors are cashing in on the recent gains.
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As the market continues to evolve, ADA is striving to maintain its upward trend, supported by positive sentiment and growing optimism for further price recovery. However, this profit-taking activity suggests that some investors are cautiously locking in gains, which could lead to price volatility in the near term.
With expectations high that the rally will continue in the coming weeks, investors are closely watching ADA’s performance to see if it can maintain its momentum. The next few days will be crucial to confirm whether Cardano is able to hold above these levels and push towards new highs.
Long term Cardano holders are selling
Cardano is testing local supply levels after a major rally as investors become cautious in their short-term strategies.
Yesterday was the percentage Daily transactions on the chain The profit-to-loss ratio is 1.53, meaning that for every ADA transaction that results in a loss, 1.53 transactions have made a profit. This metric highlights that many investors are taking advantage of recent price gains, leading some long-term holders to sell their coins for a profit.
Data from Santiment supports this view, showing a slight decrease in Cardano Average Lifespan and Average Investment Lifespan in USD On September 11, these metrics track the behavior of long-term holders, reflecting the average lifespan of ADA and the amount invested over time. A decrease in these metrics suggests that holders who bought ADA at lower prices are now making a profit, reducing the average lifespan of their holdings.
Despite this selling pressure, ADA still has the potential to maintain its upward momentum if market conditions continue to be stressful. Cardano could target higher prices, but the cautious behavior of seasoned investors suggests that the rally could soon face resistance.
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The coming days will be crucial for ADA as it needs to hold above its current levels to confirm the continuation of the uptrend. If buyers regain control and demand increases, Cardano could break through key resistance levels and target new highs.
ADA Price Action Details
ADA is trading at $0.3565 after testing a major resistance at $0.36. The price closed above the 200 4-hour exponential moving average (EMA) at $0.3490.
This is an important indicator of the short-term strength that ADA has held as resistance since early August. This successful recapture of the 200 EMA 4-hours is crucial to maintaining the uptrend.
If ADA can retest this EMA and hold it as support, it will confirm a short-term bullish trend. Breaking and holding above this level suggests that ADA could continue to push higher. Investors and analysts see the next target in the $0.38 to $0.40 range.
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However, if ADA loses this support level, the price could drop to lower demand areas, possibly dropping to around $0.33. This would indicate a weakening of the current momentum and could lead to more selling pressure.
Featured image by Dall-E, chart by TradingView