Cardano (ADA) Retests Major Resistance Wall, Will Break Happen?
December 01 2023 - 1:00PM
NEWSBTC
On-chain data shows Cardano is currently retesting a major
resistance wall, breaking through which might pave the way to
higher price levels. Cardano Is Facing On-Chain Resistance At
Current Price Levels According to data from the market intelligence
platform IntoTheBlock, there appears to be key on-chain resistance
around the $0.38 mark. In on-chain analysis, levels are judged to
be “resistance” or “support” based on whether they host the cost
basis of a significant number of investors or not. The cost basis
here naturally refers to the price at which a Cardano investor
bought their tokens. This price is obviously an important level for
any holder, as the asset’s spot value retesting this level could
mean a potential swing in their profit-loss situation. Related
Reading: Polygon Whales Go On 120 Million MATIC Buying Spree, Rally
Soon? Because of this reason, holders are particularly sensitive
when such a retest happens and as such, they may be more likely to
show some kind of move. What kind of move this would be, though,
depends on the prior profit-loss situation of the investor.
Investor psychologically works so that if the trader had been
holding a profit before this retest, they might want to take a
further gamble at it, as they could believe this same price level
would be profitable again in the future. Similarly, the holder
might lean towards selling instead if the retest is happening from
below since they would fear a scenario where the price declines
again and they dip back into losses. Now, here is what the various
Cardano price ranges are looking like right now in terms of the
concentration of investors or addresses who acquired their coins at
them: Looks like the current price range is offering a significant
amount of impedance to the price | Source: IntoTheBlock on X In the
above graph, the size of the dot represents the amount of investors
who bought inside the range. As mentioned before, investors are
likely to show some reaction when the price retests their cost
basis, so if a large number of them share their cost basis inside
the same range, the effect that the market would feel from the
retest would also be equally sizeable. From the chart, it’s visible
that the ADA price range between about $0.37 and $0.39 has a cost
basis of over 319,000 addresses, which acquired a total of 7.19
billion ADA at these levels. Related Reading: Chainlink Signal
Resurfaces: Is Another 31% Rally Coming? This is the same range
that Cardano has been retesting recently and has been struggling to
break out of. It would appear that the reason behind this might be
the resistance being offered by the sellers who are attempting to
exit at their break-even prices. Given the large scale of this
resistance wall, it would be tough for the cryptocurrency to mow
through it and gain some distance. If the asset can achieve this,
though, then the zone might turn into support instead and provide
some solid ground for a move towards higher levels. ADA Price
Cardano is trading around the $0.38 level right now, which is right
in the middle of the resistance wall. The value of the asset
appears to have been moving sideways in the last few days | Source:
ADAUSD on TradingView Featured image from Shutterstock.com, charts
from TradingView.com, IntoTheBlock.com
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