Major cryptocurrencies failed to recover over the weekend after a brutal sell-off for the most of this week, adding around 8% to the entire market value. Cardano is moving different.
A multitude of reasons contributed to the relief rise, including strong emotions that the market was oversold, pushing traders to put purchase orders for the deeply reduced prices. Analysts have linked the surge to a situation known as a “short squeeze.”
When traders short an asset, it rises in value, causing a short squeeze. To cover the short positions, they must now purchase assets. Short sellers are being squeezed by the asset’s significant price increase.
Santiment, a crypto analytics business, observed more transactions on the Cardano Network on Friday, with ADA falling to a low of $0.4 on May 12.
“Cardano whales exhibited a rush of trades yesterday, between 8 a.m. and 12 p.m. UTC, while prices were bottoming out at $0.40.” The company sent out a tweet. “These increases have frequently signaled ADA price direction shifts.”
ADA witnessed 1085 trades valued more over $100,000 on Thursday alone, the most since January.
After selling 1.7 million tokens in the previous seven months, it was revealed this week that ADA whales with a balance of 1 million to ten million coins had been buying more amid the sell-off, spending over $200 million in the last two weeks.
With the price hitting a multi-year low of $0.4, which also serves as solid support, and the forthcoming Vasil hard fork in June, which aims to significantly improve the Cardano network, it’s easy to see why whales have been so active recently.
At the time of writing, ADA is trading at $0.56, up 2.54% on the day. Cardano is the sixth most valuable cryptocurrency, having a market cap of $18.9 billion.