Why Cardano Price Increase Could Be a Fakeout
Cardano (ADA) price dropped to $1.01 on Wednesday, December 11, but has risen by around 15% in the past 24 hours. The gains have reignited hopes among altcoin holders that it can maintain its upward trend.
However, recent on-chain data suggests this may not be the case.
Cardano investors are not convinced
Cardano has been one of the top performers Ranked among the top cryptocurrencies over the past 30 days. During this period, the coin rose to a two-year high of $1.25 before cooling off and rising again yesterday.
However, there are two main reasons why the Cardano price increase may not last. First, the holding time of trading coins is significantly reduced. As the name suggests, token holding time measures how long a cryptocurrency is held without being sold.
When it increases, it means holders are retaining their assets. Declines, on the other hand, suggest otherwise, which is the case with ADA. If this trend holds or continues, then ADA pricing may face challenges Stick to $1.16.
Second, price divergence from daily active addresses (DAA) further suggests that ADA’s rally may be short-lived. This metric evaluates the relationship between blockchain activity and price movements.
Typically, rising prices attract more investors, stimulate demand and valuation. Likewise, an increase in active addresses generally indicates higher investor interest, which is positive for cryptocurrencies.
However, Santiment data shows that Cardano’s price divergence from DAA has dropped significantly by 134.26%. This shows that while the price of ADA has increased, active addresses have decreased – bearish sign Indicating that the rebound may lack support. Therefore, ADA could face a potential pullback.
ADA Price Prediction: Below $1 Again?
Indicators on the daily ADA/USD chart appear to support this bearish outlook. One-click indicator support this paper is the Moving Average Convergence Divergence (MACD). MACD uses the difference between the 12-day and 26-day exponential moving averages (EMA) to measure momentum.
When the reading is positive, momentum is bullish. But in this case, the MACD reading is negative, indicating bearish momentum around the coin. Considering the current situation, Cardano Bullish Price RiseHaving risen to $1.16, it may find it challenging to extend the term.
In this case, the price of ADA may drop to $0.98. However, if momentum turns bullish, bulls could pave the way for a move higher. If this happens, ADA could jump to $1.33 and possibly head towards the $2 mark.
Disclaimer
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