ADA, the native token for Cardano, is currently facing turbulent times amid ongoing market fluctuations. Recently, news concerning a significant token unlock has heightened concerns, leading many traders and investors to wonder if a price crash is imminent.
Cardano’s Token Unlock Scheduled
On December 24, 2024, crypto insights provider Tokenomist shared on X (formerly Twitter) that Cardano is preparing to unlock 18.53 million ADA tokens, valued at $16.37 million, on December 26, 2024. This major event represents 0.05% of Cardano’s overall circulating supply. After this unlock, an impressive 85.44% of Cardano’s max ADA supply will have been released.
ADA’s Current Price and Potential Impact
Historically, when projects unlock new tokens, it often triggers inflows into exchanges, resulting in selling pressure and a potential price drop. Analysts suggest that ADA could experience a similar fate in the near future. Currently, ADA is trading around $0.93, showcasing an 8% increase over the last 24 hours. However, this rally comes with a caveat. Trading volume has decreased by 5%, indicating lingering uncertainties among traders and investors about a possible price fall.
Cardano’s Technical Analysis and Upcoming Levels
Technical analysis indicates that ADA has been fluctuating within a narrow range of $0.86 to $0.97 over the past week. The upcoming breakout from this range will be critical in determining ADA’s trajectory. If ADA manages to secure a daily close above $0.98, there’s a potential for a 25% rise, pushing its value towards $1.25. Conversely, a drop below $0.85 could signal a decline of 12%, targeting the next support level at $0.75.
Currently, sentiment across the cryptocurrency market appears to be gradually recovering after some pronounced price drops, but the potential impacts of Cardano’s token unlock continue to loom large. As traders keep a watchful eye on the upcoming developments, the question on everyone’s mind remains: Will a price crash follow the release of 18.53 million ADA tokens?
