Cardano's recent market activity raises investor concerns as the cryptocurrency struggles to maintain stability around the key $1 mark.
The Behavior of Large Cardano Holders
The large holders' netflow metric, representing those controlling between 0.1% and 1% of the circulating supply, has fallen by 142% in the past week. This indicates a significant shift from accumulation to distribution, typically preceding price weakness, as large holders prepare for market changes.
Decline in Holder Count and Its Consequences
Cardano's holder count declined from 4.47 million to 4.40 million since November. This suggests profit-taking from the recent rally is outweighing new investor interest. The timing is significant, coinciding with a period of price appreciation, suggesting long-term investors are using strength to reduce their positions.
Technical Indicators and Key Support Levels
The four-hour chart shows critical technical damage as the price has fallen below the 20 and 50 EMAs, suggesting a shift in market structure. A breach below the $1.05 level could accelerate selling pressure. However, a move back above the EMAs could reverse this bearish scenario, potentially pushing prices towards $1.19.
With weakening metrics, the $1.05 support level is crucial for maintaining market structure. Current trends might lead to further declines, but a rebound to higher levels could shift the situation.
