The price of Cardano (ADA) fell 7.25% to $0.474 on May 22, two days after crypto analyst Justin Bons accused the blockchain project of being extremely centralized.
Bons argues that Input Output Global (IOG), Cardano's parent company, controls five of the blockchain's seven "root keys," the cryptographic keys used to sign and establish the initial block of the Cardano blockchain in 2015. 2015.
“The original keys allow code changes to be made seamlessly without the need for a Hard Fork,” the analyst said.
This means IOG can pause the chain, change the emission schedule, moderate, and more. That is an unprecedented level of centralized control over the L1 blockchain.
ADA 's decline after Bogs' comments triggered a bearish setup that could lead to another 30% drop in June.
ADA threatens to break the front triangle
Cardano 's ongoing correction continues after reaching the familiar descending trendline resistance, which is part of a popular symmetrical triangle pattern.
A symmetrical triangle in a downtrend is considered a bearish continuation pattern, characterized by the formation of two converging trend lines: one ascending and the other descending. According to the rules of technical analysis, this pattern will resolve after the price breaks below the lower trendline and falls to the maximum height of the triangle.
As of May 22, ADA price corrected after testing the upper trendline of the triangle. It is now heading for an extended retreat to the lower trendline at around $0.44, down 6.5% from the current price at the end of May.
A decisive break of the symmetrical triangle could send ADA price down to the $0.336-0.366 area—about 20-25% from current prices, depending on the breakout point.
On a brighter note, ADA price is rising again after testing a multi-month ascending trendline support.
A broader recovery is possible if the price breaks above the exponential moving Medium (EMAs) 50-3D (red wave) and 200-3D (blue wave). In that case, ADA 's initial upside price target would be around $0.67, an upside of around 35% from current prices.
The $0.67 level Vai as resistance in December 2023 and May 2022.
Cardano whales are accumulating
Cardano 's ongoing price correction coincides with a slight increase in ADA supply held by its richest addresses, suggesting these whales have been ignoring Bogs' warnings about so-called centralization Cardano chemistry.
For example, entities holding 10 million-100 million ADA (black) and 100 million-1 billion ADA (teal) increased their holdings over the past 24 hours. This trend shows that most whales are buying on dips in anticipation of further increases.
Looking more broadly, the 10M-100M group showed a sharp increase in ADA holdings around the end of March, followed by some stabilization. Meanwhile, the 100 million-1 billion group has increased steadily, especially noticeable from mid-March onwards.
During this period, the price of ADA has dropped by more than 20%, indicating that most Cardano whales predict further price increases in the long term.
