Cardano on-chain metrics signal ADA holders should tread with caution

Cardano-based large wallet addresses are taking profits as ADA price climbs.
ADA traders realized profits on their transactions between December 4 and 22, according to on-chain data.
Cardano price increased nearly 74% in the past month.

Ekta Mourya FXStreet

Cardano on-chain metrics signal the likelihood of a correction in ADA price as the altcoin’s holders engage in profit-taking. The Ethereum-killer altcoin rallied nearly 74% in the past month, sustaining above $0.61 on Friday, but this rally shows some signs of exhaustion.

Also read: Bitcoin Spot ETF likely to be approved by the US SEC by January 10, BTC price sustains above $44,000

Cardano on-chain metrics hint at neutral to bearish outlook

According to on-chain data from crypto intelligence tracker Santiment, ADA holders are engaging in profit-taking. Starting December 4, Cardano chain transactions resulted in profits for traders. These profit-taking spikes coincide with an increase in large wallet transactions.

As seen in the chart below, whale wallet transactions (or those valued at $100,000 and higher) increased in count and concentration between December 4 and 22. In the same timeframe, the Network Realized Profit/Loss metric also spikes. This implies large wallet holders of ADA booked profits as Cardano price rallied in December.

Cardano whale transactions and network realized profit/loss. Source: Santiment

Spikes in the Network Realized Profit/Loss chart show profit-taking activities of traders throughout December.

Network Realized Profit/Loss. Source: Santiment

Cardano price sustained above key support at $0.50 between December 4 and 22. Once the price hits the $0.6874 resistance, the altcoin is likely to resume its downtrend. The $0.5063 level could act as support for ADA price in its downtrend.

Three long-term Exponential Moving Averages (EMAs) at 10-day,50-day and 200-day at $0.4566, $0.3893, and $0.4437, respectively, are likely to act as support for Cardano price.

ADA/USDT weekly price chart

Author

Ekta Mourya

FXStreet

Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.

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