Cardano (ADA) Large Transactions Decline By $19 Billion Amid Weak Network Activity

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As a seasoned analyst with years of experience tracking the volatile world of cryptocurrencies, I’ve seen my fair share of market fluctuations and trends. The recent drop in large transaction volume for Cardano (ADA), coupled with a decline in overall network activity, certainly catches my attention.

On the 23rd of November, the large-scale transaction volume for Cardano (ADA) amounted to a staggering $45.41 billion. Interestingly, today’s figures indicate a significant decrease to just $26.34 billion. This decline suggests that major investors in the market may be scaling back their involvement with this cryptocurrency.

Occasionally, similar circumstances might hint at a potential decrease in an altcoin’s value. However, is it possible that this doesn’t apply to ADA?

Cardano Sees Drop in Key Areas

In the world of cryptocurrencies, significant transactions (over $100,000) indicate that major investors or ‘whales’ are active in trading. A surge in the number of such large transactions implies a higher level of participation by these influential players.

Instead, when there’s a decrease, it might suggest that institutions or whales could be selling off their assets. For instance, in the context of Cardano, significant transactions have decreased by approximately $19 billion during the last six days.

Historically, large transactions tend to drive up the value of ADA, as can be observed from the graph where there’s a noticeable rise in the metric from November 16th to November 23rd.

For that stretch of time, the price of the altcoin rose significantly, going from $0.57 to $1.09, implying that large investors (whales) likely contributed greatly to this increase. If the ongoing drop continues, there might be more pressure causing the token’s value to decrease even further.

It’s not just large transactions that are decreasing within the Cardano system; overall network activity, as indicated by Santiment’s data, has seen a substantial drop as well.

Measuring on-chain statistics like active users is a crucial way to assess the vitality of a cryptocurrency’s network. These ‘active users’ are individuals who have participated in past transactions using the cryptocurrency and continue to do so.

For the last week, there’s been a decrease in the number of active addresses on the Cardano network, which suggests that user engagement is dwindling. This downward trend could be an indication of pessimism towards ADA, hinting at a bear market.

ADA Price Prediction: Retracement to $0.82?

On the day-to-day graph, the price of ADA hovers near $1.04. But its Relative Strength Index (RSI), which gauges momentum by considering both the pace and magnitude of price fluctuations, stands at 76.91.

This indicator additionally signals if a cryptocurrency is being heavily bought (overbought) or sold (oversold). Specifically, when the value exceeds 70.00, it indicates overbuying. On the other hand, values below 30.00 indicate excessive selling, which is considered oversold.

Given the present trends, it seems like ADA’s price may have risen too much, which often precedes a potential drop.

The Bollinger Bands (BB) function as a tool that quantifies volatility and reinforces this trend. Similar to the Relative Strength Index (RSI), BB helps determine if an asset is excessively purchased or sold, with the upper band of the indicator touching the price indicating overbuying.

If the lower Bollinger Band level is reached, it signals that the asset might be oversold. As the upper Bollinger Band for Cardano (ADA) nears a hit, there’s a possibility that the price may drop down to approximately $0.82.

On the other hand, should the number of large transactions on Cardano grow significantly, it might not reach the predicted level. Instead, its value may potentially surpass $1.15.

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2024-11-29 11:09