Cardano Rallies 137% in 2 Weeks, But This Key Factor Limits Its Potential

Cardano (ADA) has witnessed a remarkable rally over the past two weeks, climbing to an eight-month high. With the price hovering near $0.80, the altcoin has captured the attention of investors. 

However, mixed signals suggest an uncertain path forward, with both bullish and bearish possibilities on the horizon.

Cardano Could Note a Reversal

The MVRV Ratio for Cardano indicates the cryptocurrency is currently overvalued, sparking concerns among market participants. Historically, a 30-day MVRV ratio between 11% and 20% is considered a danger zone for potential profit-taking.

At present, the MVRV ratio has surged to an alarming 37%, significantly exceeding this threshold. This suggests that ADA holders may begin realizing profits soon, leading to a possible decline in price.

Despite the concerning MVRV levels, Cardano’s recent rally remains underpinned by strong investor interest. Profit-taking, however, could significantly impact momentum if selling activity escalates. The market is closely monitoring these dynamics to gauge whether the rally has the strength to persist or faces an imminent reversal.

Cardano MVRV Ratio. Source: Santiment

Whale activity has played a pivotal role in sustaining Cardano’s recent surge. Transaction volumes exceeding $100,000 have reached an eight-month high, totaling $28 billion.

The heightened presence of whales across the market provides a layer of stability for ADA during its upward trajectory. These large-scale investors are likely to continue influencing price movements, particularly if selling pressure emerges.

While whales have supported ADA’s rally thus far, their activity could act as a double-edged sword. Should these major players decide to offload their holdings, it could lead to a sharp downturn. Conversely, sustained whale activity could bolster market confidence, mitigating potential losses.

Cardano Whale Transaction Volume. Source: IntoTheBlock

ADA Price Prediction: Treading the Highs

Cardano is currently trading near $0.80, just below the critical resistance level of $0.81. Over the past two weeks, the altcoin has soared by 137%, reclaiming price levels not seen since March. However, breaching $0.81 remains a challenge given the mixed market signals.

The likelihood of ADA reaching $1.00 appears slim under current conditions, as the rally shows signs of consolidation. If the resistance at $0.81 holds firm, the cryptocurrency may stabilize below this level in the near term.

Cardano Price Analysis. Source: TradingView

On the downside, if selling activity intensifies, Cardano could retreat to $0.71. Any further decline from this point would invalidate the bullish-neutral outlook, potentially driving the price down to $0.66.

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