Cardano’s (ADA) price is struggling to break out of its bullish pattern due to current market conditions and perceived overvaluation.
The Network Value to Transaction (NVT) ratio, which measures the relationship between a cryptocurrency's market cap and transaction volume, is at a yearly high of 6.43, indicating overvaluation.
Crypto whales, key investors in ADA, have sold $326 million worth of tokens in the last ten days, representing 15% of their holdings, following the Chang hard fork event.
This significant sell-off aligns with the 'sell-the-news' trend, where traders capitalize on the hype before major events and then offload their holdings.
Such strategic moves by large investors generally lead to market corrections, reducing the token's price and delaying any potential rallies.
Cardano's price recovery may not be imminent, but it is expected in the near future. The altcoin has been within a descending wedge pattern for over four months and is likely to break out eventually.
The critical support level at $0.31, if maintained, could herald a 47% rise, pushing ADA's price to $0.53. However, if investors' conditions don't improve, further declines and delays are possible.
