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Trader warns that ADA is forming a bearish pattern while the altcoin market is weaker than BTC

Cryptocurrency analysis firm Santiment says there are several potential bullish fundamentals for ADA.

According to the company, when the token was trading near the $1 mark, wealthy ADA holders suddenly increased their investment dramatically, adding more than 113% of the coins to the stack.

“Like many altcoins, ADA price has plummeted (-34%) in the last 10 days. However, large addresses holding $10,000 to $1 million in ADA have bought 113% more since the Jan. 17 price drop, amassing $53.6 million in tokens.

ADA Supply Distribution | The source: mood

In contrast, well-publicized trader Capo has issued a warning to ADA holders as the price approaches the $1 level.

He said that ADA is currently in the middle of a clear triangle pattern, which indicates bearish price action in the coming days.

“ADA confirms bearish triangle.”

The source: capo

What about bitcoin and other altcoins?

Previously, Capo thought Bitcoin would stage a recovery rally above $40,000 before making any significant move lower. For now, however, traders are more inclined to the possibility that BTC will capitulate in a more direct way.

“Whales are increasing supply and driving prices below current levels. Looks like it’s going straight down without hitting $40,000. I sold a little more. Currently holds 85% in USDT and is poised for what may come next.

While many altcoins have outperformed Bitcoin during the recent market correction, Capo said the altcoin market as a whole looks weaker than BTC. He looks at Bitcoin’s dominance rate and compares BTC’s market cap to the rest of the crypto space.

“Altcoins are even worse than BTC. With bitcoin dominance forming a triple bottom and altcoins trying to retest the bottom of the range, I wouldn’t be surprised if altcoins drop 50% over the next few days.

The source: capo

Earlier this week, Capo predicted a “maximum capitulation” in the crypto market that would take Bitcoin below $30,000 before a bullish reversal.

Regarding ETH, Santiment said that the second largest cryptocurrency by market cap is showing a steady upward trend in the number of active addresses, which the company says will support ETH price stability.

“ETH reclaimed the $2,550 mark over the weekend. With bitcoin ending the week on a nice boost and active ETH addresses holding steady, the top two cryptocurrencies by market cap should maintain steady prices if utility continues to grow.”

ETH active address-price divergence | The source: mood

Santiment is also eyeing the decentralized oracle platform Chainlink. The company said that weak-handed LINK holders have been eliminated during the recent market correction and that FUD (fear, uncertainty and doubt) may have peaked.

“The LINK price halved between January 10th and 24th. Perhaps the crowd has been quite negative towards the popular ETH-based asset. On Jan. 29, when FUD appeared to have peaked, LINK recovered a modest more than 7% in 4 hours.”

Weighted Psychology by LINK | The source: mood

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Minh Anh

According to AZCoin News

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