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Cardano has hit a price level that poses a significant challenge for bulls, seemingly solidifying around the $0.50 to $0.53 range. This zone has become a fortress of resistance, not because of historical price patterns alone, but due to the significant number of holders converging around this price point, looking to sell and break even, as indicated by the aggregation of active addresses within this average cost area.
The latest data shows a considerable clustering of addresses "At" the profitability level, suggesting that any upward price movement toward this range could encounter a wall of selling pressure. This phenomenon typically occurs when traders, who previously bought at these levels, aim to exit their positions without loss as the price rebounds to their entry points.
Given this scenario, the resistance at the $0.50 to $0.53 level appears to be indirect but incredibly formidable. It is bolstered not by order books or historical resistance but by the collective intention of numerous holders seeking to exit at break-even points.
For a breakthrough to occur, buying pressure must be strong enough to absorb the sell orders and maintain upward momentum. However, this will require a significant catalyst or change in market sentiment to entice fresh capital and convince existing holders to stay invested for further potential gains.
The chart indicates that if ADA manages to pierce through this resistance zone, the next significant level to watch would be the $0.55 resistance, marked by previous price reactions. On the downside, should selling pressure overwhelm buyers, support may be found around $0.47, with further cushions at $0.42, where the market previously showed strong buying interest.
While the current price level presents a substantial price level for Cardano, the indirect resistance formed by the break-even points of numerous holders makes this level a tough nut to crack.
Godfrey Benjamin
