Cardano price is in a potential bullish breakout that could take ADA to new highs this year. However, despite the readiness for a rally, ADA faces the threat of a decline, which could be caused by increased profit taking.
Cardano (ADA) whales turn into bulls
Whales are one of the most important and influential investor categories for any cryptocurrency, as their activity has the greatest impact on price dynamics, and this is the case with Cardano. This was evident in the way ADA moved over the past few weeks as the whales chose to unload their supplies.
However, in the last ten days the situation has changed. Addresses holding between 1 million and 10 million ADA tokens accumulated nearly 50 million coins worth $30.3 million, bringing their total holdings to 5.79 billion ADA. This is a bullish signal that promises price growth.
Second, the divergence between price and daily active addresses (DAA) is currently providing a sell signal. Divergence occurs when there is a significant difference between these two indicators, which indicates possible changes in price dynamics and investor sentiment.
As the price rises and DAA falls in the case of Cardano, it creates a sell signal that, while appearing bearish, is inherently bullish because it suggests the possibility of a short-term rise in price.
ADA Forecast: Expect a massive rally!
Currently, the price of Cardano on the candlestick chart is in a descending wedge pattern , which is considered a bullish reversal pattern as it promises a price rally after a bullish breakout.
Based on this pattern and the fact that the coin is close to a bullish breakout, the price could rise by almost 33% and reach $0.813.
However, if the selling sentiment revealed by the price and DAA divergence intensifies, a drawdown may occur. In this case, the falling wedge and bullish forecast will be canceled and the price of ADA will head towards $0.500.
