On April 10, when the crypto market experienced significant declines, Cardano’s own token, ADA, absorbed a large share of those losses.
Based on information from CryptoMoon Markets Pro and TradingView, the price of ADA dipped as low as $0.558 during trading on April 10, representing a 3% decrease in value compared to the previous 24-hour period.
Let us discuss the factors driving ADA price down today.
Weak on-chain metrics underly ADA’s downside
According to Token Terminal’s data, there seems to be a correlation between the decline in Cardano’s (ADA) price and a slight decrease in both its trading volume and the count of active core developers.
Significantly, the count of distinct GitHub users contributing over one commit each day to the blockchain’s public repository dropped from a peak of 146 developers on March 6th to 122 developers on April 10th, equating to a decrease of approximately 16.5%.
Over the given time frame, the transaction volume decreased by around 80.7%; this means it went from about $2.189 billion to just $421 million.
According to DefiLlama’s extra information, the TVL on the Cardano network dropped significantly from $473.33 million on March 16 to $371.51 million on April 10.
Over the past while, there’s been a noticeable decrease in trading activity, the number of active core developers, and Total Value Locked (TVL) for ADA. Interestingly, this downturn corresponds to a 27% price drop for ADA during the same timeframe. This relationship suggests that these metrics may have played a role in shaping ADA’s recent short-term price movements. And, as of April 10, this trend has persisted.
ADA shows weak market structure
In simpler terms, the recent drop in ADA‘s price is a normal adjustment following its peak at $0.81 in March, which was a two-year record for the cryptocurrency.
Traders cashed in their gains when ADA‘s daily RSI reading, an indicator of overbuying and overselling, surpassed 70, suggesting the cryptocurrency had been bought too heavily.
A Reading on the Relative Strength Index (RSI) greater than 70 implies that the asset is potentially overbought, increasing the likelihood of a price adjustment, such as a trend reversal or correction.
ADA is pursuing an extended downtrend, confirmed by its downward movement inside a descending parallel channel. The RSI is positioned at 48, suggesting that the market conditions still favor the downside.
Cardano price faces a difficult recovery
After hitting a resistance at $0.61, the latest drop in ADA‘s price suggested more potential declines. This price point acted as a strong barrier, indicating the bulls might struggle to reverse this trend if they cannot manage to turn it into support. Consequently, there is a higher chance that ADA will continue its current downward trend if the bulls fail to make $0.61 a supportive level.
According to IntoTheBlock’s on-chain data, the pessimistic view is supported. Their In/Out of the Money Around Price (IOMAP) model reveals that the upper limit of the channel is situated slightly above the $0.58 to $0.60 price range, which was where around 2.17 billion ADA were previously purchased by approximately 132,970 investors.
The strong resistance held firm, preventing any upward pressure on ADA‘s price from causing significant gains. For ADA investors looking to buy, it is essential to convert this resistance level into a support zone to prevent potential losses.
Read More
- LDO PREDICTION. LDO cryptocurrency
- JASMY PREDICTION. JASMY cryptocurrency
- Can Ethereum ETFs outperform Bitcoin ETFs – Yes or No?
- Chainlink to $20, when? Why analysts are positive about LINK’s future
- Citi analysts upgrade Coinbase stock to ‘BUY’ after +30% rally projection
- Why iShares’ Bitcoin Trust stock surged 13% in 5 days, and what’s ahead
- Spot Solana ETF approvals – Closer than you think?
- Orca crypto price prediction: Buying opportunity ahead, or bull trap?
- Top 10 Stocks and Crypto Robinhood Alternatives & Competitors
- ‘China’s going to have it’ – Donald Trump crypto stance, finally explained
2024-04-10 23:47