Despite ADA’s latest recovery, the on-chain metrics suggest that the price will soon drop as the hype around Cardano’s staking rewards continues to fade as on-chain metrics have a hard time holding up the inflated ADA prices so let’s find out more in today’s Cardano crypto news.
Retail investors are slowly losing interest in Cardano after the Shelley launch on the project’s mainnet. The sudden surge in ADA prices after the Shelley launch was unsustainable which resulted in a 34% downswing when the prices hit yearly highs. ADA will continue to experience losses if the support at $0.114 crucial level fails to hold. Even though Cardano surged by more than 20% over the past few days, despite ADA’s recovery, the on-chain metrics are pessimistic about the near-term prices.
Cardano’s recent price action suggests that the Shelley launch served as a “sell the news” event and the founder of Cardano revealed that the protocol was transitioning to a proof of stake consensus algorithm and the asset gained 182%, reaching a yearly high before launch. After the hard fork, the hype died down and ADA took a 34% price drop to a low of $0.102. Since then, Cardano recovered some of the losses and gained 22% and settled at $0.124 but the different on-chain metrics show that the bulls will have a hard time moving the prices higher.
IntoTheBlock’s In/Out of the Money Around price model shows that $0.114 is a huge trend booster for Cardano as transaction history shows, it is the biggest supply barrier below the so-called “Ethereum killer” which could hold the falling prices at bay. More than 12,000 addresses had purchased more than 2 billion ADA which could serve as an area to hold back some of the selling pressure from the drop, preventing Cardano from falling further. If the support level breaks, then it could be catastrophic for the ones betting on the upside trend. The IOMAP shows that the next major supply level reinforcing ADA’s uptrend sits at $0.085 so if both break, ADA holders can expect their investments to crash by another 30%.
The cryptocurrency’s market unpredictability means that the bullish outlook cannot be taken out of the question. The IOMAP cohorts model shows that Cardano’s ADA faces a strong resistance ahead if there’s a major upwards movement. More than 8000 addresses hold 2.9 billion ADA between $0.131 and $0.134 which means it will take a huge amount of buying pressure to send the price higher.
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