Cardano (ADA) Price Prediction: Discrepancies Between Whales and Retail Investors, Surge in Open Interest

As of Wednesday (June 25), the price of Cardano (ADA) has slightly fallen by less than 1%, losing momentum after forming a doji in the previous trading day. On-chain data shows that the support from large investors (commonly known as "Whales") is rising, while retail investor holdings in Cardano have decreased, indicating a decline in risk appetite. The surge in ADA open contracts suggests that the likelihood of a leveraged-driven upward trend is increasing due to heightened buying activity and increased capital inflows.

Cardano retail investor reduces holdings

Santiment data shows that since June 1, investors holding 10 to 10,000 ADA have sold 10 million ADA tokens, and their current holdings have reached 2.46 billion ADA. Typically, for tokens trading below $1, this position size is related to the holdings of retail investors.

Turning to large investors holding over 10 million ADA, who purchased 270 million ADA tokens in June, increasing their holdings from 17.96 billion ADA to 18.23 billion ADA.

Large investors' confidence in ADA is increasing, driving its long-term optimistic outlook. However, the decline in retail investors' holdings aligns with their insufficient capacity to hold, increasing the likelihood of them missing the next round of recovery.

(Source: Santiment)

The open interest in ADA contracts exceeds 700 million USD

CoinGlass data shows that ADA's open contracts have risen by 1.48% in the past 24 hours, reaching $717.28 million. The increase in open contracts reflects heightened buying activity that has driven capital inflow into the derivatives market.

As the open interest (OI) surged, the 0.0042% weighted financing rate for open interest consolidated the buying activity, surpassing the bearish positions. If the financing rate is positive, the longs pay this rate to maintain the balance between the swap price and the spot price.

The long-short ratio is 1.0367, indicating a neutral stance in the market, with slightly more long positions. Specifically, in the past 24 hours, the amount of long positions closed was $296,560, while the amount of short positions closed was $303,640.

(Source: Coinglass)

ADA Price Analysis

FXStreet analyst Vishal Dixit stated that the price action on the ADA daily chart indicates a descending channel, connecting the swing highs from May 23 and June 11. The rebound target points to the upward trend line near $0.64. If the closing price breaks above the trend line, it could extend the upward trend until reaching the pivot point of $0.7309.

The Moving Average Convergence Divergence (MACD) indicator shows that the MACD line is approaching the signal line and will soon cross. The decline of the red histogram indicates a decrease in selling pressure. Investors can consider the green histogram rising from the zero line when the MACD crosses the signal line as a buy signal.

The Relative Strength Index (RSI) has bounced back from the oversold area to 38, indicating that selling pressure is gradually decreasing.

However, if ADA records a bearish close on Wednesday, the reversal may retest the pivot point of the psychological support level at $0.50.

(Source: FXStreet, Trading View)