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Cardano faces significant challenges as its total supply in profit experiences a sharp decline, reflecting the altcoin’s struggle amidst bearish market conditions.
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Moreover, the 81% drop in daily unique addresses indicates a diminishing user engagement, further exacerbating the price pressures on ADA.
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“With only 29.06 billion ADA remaining profitable, the outlook for current holders appears increasingly precarious,” noted a latest analysis from COINOTAG.
Cardano’s drop in total supply in profit reflects challenging market conditions, with ADA struggling at $0.93 due to diminished user engagement.
Cardano’s Supply in Profit Dwindles
Recently, on-chain data analysis highlighted a significant reduction in Cardano’s total supply in profit, decreasing by 3.55 billion ADA in just a week. As of the latest metrics, only 29.06 billion ADA of the total 42.56 billion supply remains profitable. This trend suggests a critical shift in market dynamics, where a large faction of investors are now encountering losses on their holdings, indicative of heightened selling pressure and a decline in overall market sentiment.
The altcoin’s price currently sits at $0.93, marking a 13% decrease over the past week. The prevailing bearish sentiment in the market underlines the escalating risks associated with holding ADA at this juncture.
Cardano’s Total Supply in Profit. Source: Santiment
Additionally, analyzing Cardano’s network activity reveals a notable 81% drop in daily unique addresses engaged in transactions over the past week. This precipitous decline in user participation illustrates a weakening demand signal and poses further challenges to ADA’s price stability, as reduced network activity generally correlates with falling interest in the cryptocurrency.
Cardano Daily Active Addresses. Source: Santiment
ADA Price Prediction: Will It Fall to $0.85 or Rally to $1.12?
The current market structure suggests that ADA’s Relative Strength Index (RSI) indicates a bearish trend. With an RSI of 46.83, ADA is positioned below the neutral mark, suggesting a prevailing weakness in buying power. The RSI functions as a vital tool for gauging market sentiment, and values below 30 may indicate oversold conditions, while anything above 70 suggests overbought territory.
Given the current RSI reading and the general downward trend, the risk of further price declines is elevated, especially if buying interest does not return soon. A decline to $0.85 is feasible unless there’s a substantial rebound in market sentiment and buying activity.
Cardano Price Analysis. Source: TradingView
Conversely, if there is a surge in buying sentiment and accumulation increases, ADA could potentially recover and target a rally towards $1.12 as market confidence shifts.
Conclusion
In summary, Cardano is currently experiencing a challenging phase, evident in its dwindling supply in profit and declining user engagement. With the price lingering around $0.93 and an RSI indicating bearish sentiment, investors are faced with critical decisions in navigating the fluctuating market conditions. A vigilant eye on market developments will be crucial for predicting ADA’s next movements, whether it consolidates or potentially rebounds in the coming weeks.
