- Cardano (ADA) has recently faced a significant downturn, affecting many investors.
- On-chain data indicates a higher number of daily transactions resulting in losses compared to profits.
- ADA’s value has dropped by nearly 10% over the past month, raising concerns about its future.
Discover the latest insights on Cardano’s recent market performance and what it means for investors.
What Do Daily Transactions Indicate?
ADA’s price dipped to $0.42 before a partial recovery. The consistent decrease in value led to most holders incurring losses in their transactions. The analysis of ADA’s daily transaction volume showed a profit/loss ratio of 0.94, indicating that profitable transactions were outnumbered by those resulting in losses. When this ratio falls below 1, it often points to a stronger selling pressure compared to buying pressure. Presently, 2.62 million addresses, or 59% of all ADA holders, are experiencing investment losses.
What Are the Technical Indicators Saying?
Data from ADA’s Elder-Ray Index suggests a potential continued decline in ADA’s value in the short term. This indicator, which evaluates the market strength of buyers versus sellers, showed a negative value of -0.038, indicating bear dominance. Additionally, ADA’s relative strength index (RSI) was trending downward at 41.94, signifying higher selling pressure than buying activity. However, the market value/realized value (MVRV) ratio suggests a possible buying opportunity at the current levels, which could potentially drive the price up to $0.479.
Key Inferences for Investors
– ADA’s profit/loss transaction ratio below 1 indicates stronger selling pressure.
– A negative Elder-Ray Index value suggests bear dominance in the market.
– RSI trending downwards reflects higher selling activity.
– MVRV ratio points to a possible buying opportunity at current price levels.
Conclusion
In conclusion, 59% of ADA holders, equivalent to approximately 2.62 million addresses, are currently facing losses. Technical indicators like the Elder-Ray Index and RSI point towards a potential continued value decline for ADA in the short term, with bear strength dominating the market sentiment. However, the MVRV ratio presents a glimmer of hope for a price rebound.
