The month of May brought a 5% decline in the price of Cardano (ADA), but June seems to be off to a promising start for bullish investors. On-chain data reveals a significant increase in transaction volumes, pointing towards a positive performance for ADA in the coming weeks. Additionally, the involvement of whale investors further strengthens the case for potential price impacts. This article examines the recent surge in transactional activity and its potential effects on the ADA price.
Rising Transaction Volumes Highlight Growing Demand:
Since the launch of the native Djed stablecoin in March 2023, transactional activity on the Cardano network has been on the rise. On June 1, the network reached a new peak, recording 102,860 confirmed transactions, representing a substantial 70% increase compared to May 1. This surge in economic activity suggests a growing demand for the native ADA coin. If this momentum can be sustained, ADA may gather enough bullish momentum to surpass the $0.40 resistance level.
Whales Amplify the Bullish Sentiment:
While certain Layer 1 networks have experienced spikes in transaction volumes fueled by lightweight NFT and meme tokens, Cardano stands apart. The recent surge in ADA transactions has been primarily driven by large institutional investors. As total transactions increased by 70% in May, whale transactions saw an even more significant rise of 200% during the same period. The increase in whale activity, indicated by the Large Transactions metric tracking transactions exceeding $100,000 in value, signifies growing confidence and increased investment by institutional players.
ADA Price Prediction: $0.50 in Sight?
Analysts suggest that Cardano could soon reclaim the coveted $0.50 milestone based on IntoTheBlock’s Break-Even Price Distribution data. However, breaking the initial resistance at $0.40 might pose a challenge. This level coincides with a zone where 392,400 investors hold 571 billion coins, potentially leading to sell-offs if they break even at $0.39. Despite this obstacle, a sustained bullish momentum could shift sentiment among these holders, potentially propelling the rally towards $0.50.
Support and Potential Downside:
While the bullish ADA price prediction holds promise, it could face a setback if the price drops below $0.35. However, the presence of 385,400 investors who acquired 3.27 billion ADA at an average price of $0.35 may offer support. Should ADA fail to hold this key support level, it could face another downward swing toward $0.30.
Conclusion:
The month of June appears promising for Cardano (ADA) as on-chain data reflects a surge in transaction volumes and increased involvement of whale investors. This combination of factors indicates growing demand and confidence in ADA, potentially leading to a positive performance in the coming weeks. However, the resistance levels at $0.40 and $0.50, along with potential downside risks, should be closely monitored by investors. With the cryptocurrency market being inherently volatile, caution remains necessary when considering any price predictions.
