Cardano (ADA) has recently captured the attention of the market with its surge above $1. At press time on January 16, 2025, Cardano was trading at $1.05, marking a 2.6% increase over the last 24 hours, with a weekly gain of 13.9%.
This uptick has been part of a broader market recovery, potentially catalyzed by the anticipated policy changes from the incoming Trump administration regarding cryptocurrency regulations, which could clarify rules for market players.
Whales on an ADA accumulation spree
Amidst this recovery, a significant development has been the accumulation of around 130 million ADA tokens by whales within the past few days, according to data from the on-chain analytics firm Santiment and insights from cryptocurrency analyst Ali Martinez.
This whale activity, where large investors significantly increase their holdings, often signals a strong vote of confidence in the asset’s future value.
Earlier today after whales purchased 30 million ADA tokens, the price of ADA responded positively to this accumulation, rising from $0.998 to $1.11, showcasing the immediate impact of such large-scale buying on the market.
Delving into Cardano’s on-chain metrics, we observe that Cardano’s network has experienced varying levels of large transaction activity.
While there was a peak of 5.62k large transactions in early December, this number has recently settled at a 7-day low of 4.17k.
This decline might suggest a phase of consolidation rather than continued aggressive buying, yet the accumulation by whales indicates strategic positioning for potential future gains.
Moreover, the holding time of ADA tokens has increased by 78% over the past week, as revealed by IntoTheBlock’s data, signalling that investors are less inclined to sell, thereby reducing market sell pressure and bolstering confidence in ADA’s near-term potential.
The whale accumulation has reshaped the supply distribution, with a noticeable concentration of ADA in large-holder wallets, potentially reducing the available supply in the open market and thereby supporting price increases.
Furthermore, trading volumes have remained steady, indicating sustainable growth rather than speculative frenzy, which often leads to more stable price movements.
Cardano price has formed a bullish pennant pattern
From a technical analysis perspective, ADA’s price action is particularly intriguing. The cryptocurrency has formed a bullish pennant pattern on the 4-hour timeframe, a formation typically preceding a breakout.
Currently, Cardano is consolidating around $1.08, a level that suggests a strong support base after bouncing from a recent low of $0.87.
The Chaikin Money Flow (CMF) index hovers near the zero line, indicating a market in equilibrium but with a slight lean towards buying pressure, which supports a potential for a stable upward trajectory.
The critical resistance level to watch is at $1.10. A breakout above this could pave the way for ADA to challenge the $1.50 mark, aligning with historical resistance points.
This target is not only technically feasible but also psychologically significant, as it represents a round number often watched by traders.
The confluence of whale accumulation, a bullish technical setup, reduced selling pressure due to increased holding times, and a favourable market environment among other key catalysts previously highlighted by Invezz position Cardano (ADA) well for a potential price breakout.
While there are no guarantees in the volatile crypto market, the indicators suggest that ADA has a real chance of hitting the $1.50 mark if these conditions persist.
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