As a seasoned crypto investor with a knack for deciphering market trends and a portfolio that has weathered multiple crypto winters, I find myself grappling with the recent double-digit decline in Cardano‘s (ADA) value over the past week. The current trading price of $1.04 is a stark reminder of the volatile nature of this space, but it’s not just the broader market doldrums that have contributed to ADA’s woes.
Over the last seven days, the value of Cardano has fallen significantly, dropping more than ten percent. At the moment, it is being exchanged for approximately $1.04, representing a decrease in price by around eleven percent within this timeframe.
In addition to the overall reduction in crypto trading, the fall in the price of ADA can be linked to a significant decrease in the length of time it’s being held and an increase in selling by major investors or ‘whales’.
Cardano’s Holding Time Drops and Large Holders Scale Back
Over the past week, an analysis by BeInCrypto of Cardano’s on-chain transactions shows a significant decrease in the length of time coins are being held before they are traded. Specifically, IntoTheBlock’s data indicates that this metric dropped by 48% during the reviewed period.
As a researcher, I find that the holding time of an asset refers to the typical length it stays in users’ wallets before being either sold or transferred. A decrease in this metric might indicate heightened selling activity among market participants, potentially signaling a shift in their sentiment towards the asset.
Frequently, this indicates a decrease in investor confidence or a change in overall market opinion about the asset. Consequently, the reduction in ADA ownership duration among its investors could potentially prolong its temporary price drop.
Additionally, it’s been observed that ADA whales have noticeably decreased their coin acquisition over the past week. This is evident from the substantial 134% drop in the net flow of large holdings during this period.
In simpler terms, ‘large holders’ are addresses that possess more than one percent of a given asset’s current total supply. The ‘netflow’ indicates the amount of coins these large holders have bought minus the amount they have sold during a particular time frame.
When significant investors or ‘whales’ decrease their purchases of an asset, it means they’re selling more than they’re buying – a trend indicated by a negative netflow. This reduction in accumulation could signal apprehension or bearish opinions among influential market players, potentially leading to instability in the asset’s price.
ADA Price Prediction: The Bears Are In Control
According to ADA’s Balance of Power (BoP) on a daily chart, the current trend leans bearish. At this moment, the BoP indicator stands at -0.34, indicating that selling pressure is slightly stronger than buying pressure in the market. This tool is useful for spotting trends and potential changes in direction as it measures the balance between buying and selling forces in the market.
As a researcher, I’m observing that a Base-of-Price (BoP) value less than zero implies sellers have more control in the market, which often reflects a bearish outlook and might lead to a decrease in price. If this bearish trend continues, it’s plausible that the price of Cardano (ADA) could dip below the $1 mark and potentially trade around $0.92.
Conversely, should bullish momentum prevail, the ADA coin might surpass the resistance at $1.07 and regain its peak of $1.32 from two years ago.
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2024-12-15 15:11