Cardano (ADA) Experiences Turbulent 4 Days: Peaks at $0.48 Before a 10% Drop – What’s on the Horizon?

• Cardano’s ADA token has experienced a significant price drop of nearly 10% over the past three days.
• This decline has occurred despite an increase in the number of daily active addresses trading ADA.
• The current demand for ADA appears insufficient to initiate a price rally, with key momentum indicators suggesting a preference for selling over accumulation.

Cardano’s ADA token sees a price drop despite an increase in daily active addresses, suggesting a divergence between price movements and network activity.

ADA’s Price Drop Amidst Increased Network Activity

Despite breaking out of a descending triangle and briefly rallying at the beginning of May, Cardano’s ADA token is back trading at the $0.44 support price level. The altcoin’s price peaked at $0.48 on May 4th, but has since declined, losing 8% of its value in the past three days.

Insufficient Demand for ADA

An on-chain assessment of ADA’s demand shows that the price decline has occurred despite an increase in the number of addresses trading the altcoin. Data from Santiment reveals a 15% rise in the number of daily addresses completing at least one ADA transaction since May 3rd. However, key momentum indicators like the Relative Strength Index (RSI) and the Money Flow Index (MFI) suggest a preference for selling over accumulation.

Negative Sentiment Surrounding ADA

The divergence between ADA’s price movements and network activity may be due to the negative sentiment that has continued to trail the altcoin. ADA’s Weighted Sentiment currently stands at -0.74. Over the past month, ADA has lost nearly 30% of its value, making it difficult for daily traders to turn a profit. An assessment of ADA’s daily transaction volume ratio in profit to loss reveals more losses than profits over the past month.

Conclusion

Despite an increase in network activity, ADA’s price has suffered a significant decline. This suggests a divergence between price movements and network activity, possibly due to the negative sentiment surrounding the altcoin. As ADA continues to lose value, it remains to be seen whether an increase in demand can initiate a price rally.