Following a 5% drop in May, Cardano (ADA) has started June 2023 on an optimistic note, indicating a possible rebound.
An increase in whale transactions indicates growing traction on the network that could spark a price breakout above $0.40.
On June 1, Cardano’s daily network transaction volume reached a milestone for the first time in 2023, reaching 105,000 transactions.
Cardano (ADA) price fell 5% in May. On-chain data shows that bullish investors are leading the way to a June 2023 start. ADA is on track to have a positive June as trading volumes surge to new highs.
Transaction activity on the Cardano network has been on the rise since the launch of the native Djed stablecoin in March 2023, reaching a new 2023 peak on June 1.
With trading activity from whale investors also increasing in recent weeks, how much of an impact will this have on the ADA price?
Cardano transaction volume hits new high
On June 1, the Cardano blockchain network recorded 102,860 confirmed transactions. This is a 70% increase from the record on May 1.
The chart below shows that total transaction volume on May 31st was 105,000. The last time Cardano transaction activity reached these heights was in December 2022.
When economic activity on a blockchain network grows at this rate, it shows that there is demand for the underlying native token. If Cardano can maintain this breakout level of traction, ADA could gain enough bullish momentum to scale the $0.40 resistance level.
Whales in action
Layer 1 networks like Bitcoin, Litecoin, and Dogecoin have all seen triple-digit transaction volume spikes driven by Ordinals. These lightweight NFT and meme tokens have been heavily criticized for taking up block space while contributing very little economic value.
The same cannot be said for Cardano. The recent surge in ADA trading has been driven primarily by large institutional investors.
The chart below shows that as total trading volume increased 70% in May, whale trading volume also increased 200% during the same period.
The large transactions indicator tracks the number of confirmed transactions valued at more than $100,000. When it rises, a bullish signal suggests that whale investors are increasing their stake in the underlying asset.
All in all, the increase in whale activity has been crucial to the recent surge in economic activity on the Cardano network. If this trend continues, ADA price could break some new ground in the coming weeks.
ADA Price Prediction: $0.50 Coming?
IntoTheBlock’s breakeven price distribution data suggests that Cardano may soon reclaim the $0.50 milestone.
However, ADA may struggle to break through the initial resistance at $0.40. At this area, 392,400 investors holding 571 billion tokens could sell at $0.39 at breakeven and inadvertently trigger a retracement.
Nonetheless, if the bullish momentum prevails, these holders may turn bullish and push the rally towards $0.50.
Nonetheless, the bullish Cardano price prediction could be short-lived if the ADA price drops below $0.35. However, the 385,400 investors who purchased 3.27 billion ADA at an average price of $0.35 could provide some support.
But failure to hold this critical support level might force ADA to fall again to $0.30.
