Cardano (ADA) Price Prediction: Whale Buying Frenzy Outpaces Retail Investors, ADA Expected to Break Out of Descending Channel

As of this Tuesday, Gate reported that Cardano (ADA) fell by 1%, continuing the 0.88% decline from Monday, while maintaining a sideways trend within the 7-day price range. Although the pullback has shaken retail investors, large investors (commonly known as "Whales") have significantly increased their risk exposure, purchasing 490 million ADA tokens. The divergence between these Whales and retail investors, along with the weakening optimism indicated by technical and derivative data, puts ADA at a critical crossroads. Can ADA break through the current descending channel with the push from Whales?

1. Smart investors continue to accumulate ADA, whales and retail investors diverge

The ADA supply distribution from Santiment shows a trend of divergence between large holders and retail investors. The holdings of large holders with more than 1 million ADA tokens have increased from 23.25 billion ADA on January 4 to 23.74 billion ADA. This indicates that as the ADA price pulls back, the whales are actively accumulating, viewing it as a buying opportunity.

At the same time, the holdings of investors holding less than 100,000 ADA tokens decreased from 6.86 billion to 6.72 billion. This polarized purchasing power trend among investors aligns with the pullback of Cardano. Retail investors are closing positions to avoid losses in low-cap portfolios, while savvy investors are seizing this downturn opportunity, showing confidence in the long-term potential of ADA.

2. The ADA derivatives market remains optimistic, but long liquidations are increasing

Coinglass data shows that open interest (OI) has increased slightly by 0.68% to $769.92 million. The gradual rise in OI is related to the increase in Cardano derivative purchasing activities. To further corroborate the increase in buying volume, the OI weighted funding rate has been adjusted upward by 0.0074% to maintain consistency between swap prices and spot prices. Positive funding rates are imposed on buyers to offset the spike in swap prices caused by leveraged exposure. This indicates that, despite the pullback in spot prices, traders in the derivatives market still hold a certain level of optimism towards ADA.

However, the liquidation data indicates an increase in liquidations of long positions. Over the past 24 hours, the total amount of long liquidations was $949,980, while the total amount of short liquidations was less than half, at $333,060. As bullish traders are withdrawing, the long/short ratio has dropped to 0.9704, indicating a slight increase in active short positions. This suggests that market sentiment remains uncertain, and the confidence of the bulls has been somewhat impacted.

3. The integration of Cardano determines its fate, technical indicator analysis

As of the time of publication, Cardano has fallen by 1%, following a bearish doji candle on Monday that dropped by 0.88%. During the pullback, ADA remains in a sideways trend between Tuesday's high of $0.5939 and Friday's low of $0.5450.

From a technical perspective, the peaks on May 23 and June 10 formed a pair of parallel descending trend lines, while another trend line was formed by the lows on May 19, June 5, and June 23, completing a descending channel pattern. As the short-term downtrend approaches the support level at $0.5450, a close below this support level may test the June low of $0.5100, slightly above the lower limit of the channel.

MACD Indicator: The Moving Average Convergence Divergence (MACD) triggered a buy signal on Sunday, with a surge in the green histogram. The MACD line crossed above the signal line, supporting the bullish signal.

RSI Indicator: However, the Relative Strength Index (RSI) is at 37, positioned above the oversold boundary, indicating bearish momentum.

To solidify the upward trend, Cardano must close above the upward trendline that coincides with Tuesday's high of $0.5939. In this scenario, a breakout rebound could aim for the level of $0.6186, which was last tested on June 14.

(Source: Trading View)

Conclusion:

Cardano (ADA) is currently in a crucial consolidation phase. Despite whales actively accumulating, showing confidence in its long-term potential, the retail investors' sell-offs and the increase in long liquidations in the derivatives market have resulted in short-term trends that remain highly uncertain. Whether ADA can break through the current descending channel will depend on its ability to successfully hold above the trend line at $0.5939. Investors should closely monitor the movements of whales and changes in technical indicators to gauge the future direction of ADA.