Cardano holders sell as ADA gains 11% amid rising profits
Cardano (CRYPTO:ADA) has risen 11% in the past week, defying the general market trend and prompting long-term holders to sell off some of their coins for profit.
With the recent price surge, transactions involving ADA have become profitable, leading to profit-taking activity among holders.
Based on on-chain data, the ratio of daily transactions in profit versus loss for ADA has reached 1.53.
This means that for every transaction resulting in a loss, 1.53 transactions generated a profit.
Such a high ratio has encouraged long-term holders to capitalize on their gains, as evidenced by a slight decline in Cardano’s Mean Coin Age and Mean Dollar Invested Age.
A decrease in these metrics suggests that holders, who usually purchase at lower prices, are selling to lock in profits, which in turn reduces the average age of their holdings.
Despite the ongoing profit-taking, Cardano shows potential for further gains.
The ADA price is attempting to break above a descending trend line that has been acting as resistance since July 15.
This resistance line, formed due to significant selling pressure, has kept the price from rising further.
However, with strong demand backing the recent rally, ADA could potentially break above this level.
As stated in technical analysis, if Cardano manages to break through the resistance, its price could surge by another 34%, reaching a two-month high of $0.47.
However, if profit-taking continues to intensify and buying pressure diminishes, the effort to break above this key level could fail.
In such a scenario, Cardano's price might decline sharply to around $0.27, negating the bullish outlook.
At the time of reporting, the Cardano (ADA) price was $0.3564.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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