Cardano (ADA) has been grappling with the significant resistance zone at $0.50, a crucial psychological and technical barrier. This region became a focal point after ADA’s price dropped below it on April 24 without converting it into support. Despite briefly bouncing above this level on May 20, ADA has since fallen back and is trading at $0.4773, a slight decrease of 0.23% in the last 24 hours.
Data from the analytical platform Santiment highlights notable ADA supply distribution trends. Wallets holding between 1K and 100K ADA have steadily declined since November 30, 2023. Conversely, wallets containing between 10 million and 100 million ADA experienced a sharp drop in January 2023 but gradually increased throughout 2024.
However, the growth in these large wallets is significantly slower compared to the 2020-21 rally, indicating a lack of aggressive accumulation by whales. Social metrics for ADA further underscore its challenges. Santiment’s analysis reveals that social volume has been trending downward for over two months, with the weighted sentiment remaining predominantly negative since March. This decline in social engagement and sentiment suggests a waning interest and enthusiasm for ADA among the broader cryptocurrency community.
The liquidation heatmap, which tracks liquidity zones, identifies $0.50 as a crucial area. This zone was recently tested and rejected, leading to ADA’s current consolidation of around $0.477. This consolidation phase could set the stage for a rally towards $0.525, but it might also attract more short positions, increasing the available liquidity above the current price.
In the short term, the balance between short and long positions appears relatively even. However, recent pullbacks, such as the one from $0.51, have liquidated many late long positions. The liquidation levels profile indicates a higher vulnerability for long positions, with significant clusters at $0.479 (high leverage), $0.475 (medium leverage), and $0.466 (low leverage) as potential downside targets.
Despite ADA’s resilience, sustaining a price above $0.50 remains a formidable challenge. The lack of interest from whale investors and the negative social sentiment are significant hurdles. For ADA to break out of its current consolidation and achieve a bullish trajectory, it should overcome these barriers and attract renewed interest from retail and institutional investors.
While Cardano shows potential, a sustained breakout above $0.50 is challenging. To regain momentum, the cryptocurrency must navigate waning whale interest, negative sentiment, and critical technical levels.
