Will Cardano Network Activity Rise Again After ADA 18% Decline?
The price of Cardano (ADA) has fallen by approximately 18% in the past seven days, in line with the broader market after a period of sustained gains. But beyond price, Cardano network activity is also feeling the heat.
The project’s overall decline has raised concerns about the altcoin’s short-term performance. Accordingly On-chain analysisthese concerns may be justified.
Cardano hits major hurdles
December 8, Cardano price rises to a yearly high of $1.22. But today, because significant sell-off. While ADA holders may expect a rally in the near term, the lack of funds/lack of funds around price (IOMAP) suggests this may be challenging.
IOMAP is an indicator that finds on-chain support and resistance. To do this, the indicator compares addresses with current unrealized profits with addresses with losses. Typically, the greater the volume within a price range, the stronger the support or resistance.
According to IntoTheBlock, the main resistance level for ADA is around $0.92. In this area, 58,470 Cardano addresses have accumulated 951.02 million tokens, which is higher than the number of coins in the coin between $0.74 and $0.88.
should Buying pressure Remain low, then the price of ADA may find it difficult to rise above the current price. Instead, the coin may undergo a prolonged correction.
Data from Santiment supports this view, highlighting a significant drop in Cardano network activity. On December 16, the number of 24-hour active addresses exceeded 51,000, but as of press time, this number has dropped to 32,700.
The active address is defined as wallet Participate in successful transactions as a sender or receiver within a given period. This indicator can serve as a powerful indicator index Daily user activity on the blockchain.
An increase in active addresses indicates increased user engagement, which is generally positive for price action. Therefore, a continued decline in this indicator indicates bearish sentiment towards ADA.
ADA Price Forecast: Long-term correction is inevitable
From a technical perspective, the exponential moving average (EMA) indicates that Cardano’s price may continue to fall. EMA is an indicator that measures the trend of cryptocurrencies.
On the daily chart, ADA price has fallen below 20 EMA (blue). A break below the moving average indicates a bearish outlook. Furthermore, the coin’s value is roughly the same as the 50 EMA (yellow).
This position indicates that Cardano is about to lose support at $0.88. If it remains unchanged, the price of ADA may drop to $0.77. In a highly bearish scenario, the altcoin’s value could drop to $0.55.
However, if Cardano network activity increases, this trends may change. In this case, the cryptocurrency’s value could jump to $1.33.
Disclaimer
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