I have mentioned before that the ADA blockchain project is too centralized, causing heated discussions, leading to a 7.25% price correction to $0.474 in the past two days.
Input Output Global (IOG), the parent company of Cardano, controls 5 of the 7 "genesis keys" of the blockchain. These keys were used as early as 2015 to sign and establish the initial blocks of the Cardano blockchain.
The genesis keys allow for seamless code changes without the need for a hard fork.
This means that IOG can stop the chain, change the emission schedule, conduct audits, and so on, to a degree of centralized control unprecedented in L1 chains.
The decline in ADA may lead to another 30% drop in price in June.
ADA faces the risk of a triangle breakdown.
After reaching the familiar descending trendline resistance, Cardano further corrected, which is part of the current symmetrical triangle pattern.
The symmetrical triangle in a downtrend is considered a bearish continuation pattern, characterized by the formation of two converging trendlines: one rising and the other falling. As a rule of technical analysis, when the price falls below the lower trendline and drops to the maximum height of the triangle, the pattern disappears.
As of May 22, ADA's price started to pull back after testing the upper trendline of the triangle. Currently, by the end of May, the price will continue to fall to around $0.44, about 6.5% lower than the current price level.
A decisive breakdown of the symmetrical triangle could lead to ADA's price falling to the $0.336-0.366 range, approximately a 20-25% drop from the current price level, depending on the breakdown point.
Fortunately, ADA's price is rebounding after testing the support of the rising trendline for several months.
If the price breaks through its 50-3D (red wave) and 200-3D (blue wave) exponential moving averages (EMA), a broader rebound may occur. In this case, ADA's initial upward target will be around $0.67, about a 35% increase from the current price level.
The $0.67 level is a resistance level from December 2023 and May 2022.
Cardano whales are accumulating
The ongoing price adjustment of Cardano coincides with a slight increase in the supply of ADA held by the richest addresses, indicating that these whales have ignored the warnings about Cardano's so-called centralization.
For example, entities holding 10 million to 100 million ADA (black) and 100 million to 1 billion ADA (blue) have increased their holdings in the past 24 hours. This trend indicates that most whales are buying in while the price is falling, in anticipation of further gains.
Overall, the holdings of the 10 million to 100 million ADA group sharply increased around the end of March, followed by a certain degree of stability. Meanwhile, the 100 million to 1 billion group has steadily increased, especially since mid-March.
During this period, ADA's price dropped by more than 20%, indicating that most Cardano whales expect further long-term price increases.
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