Cardano (ADA) Faces Decline After Reaching Local Top

4 months ago 2

ARTICLE AD BOX

During the intraday trading session on July 4, Cardano’s (ADA) Age Consumed metric rose to a 35-day high, suggesting that previously dormant tokens have begun to change hands.

This surge has since been followed by a decline in the altcoin’s price, signaling that a local top has been reached.

Cardano Long-Term Holders Are on the Move

On July 4, 1.32 billion ADA coins worth approximately $433 million at current market prices were moved, as indicated by the spike in its Age Consumed metric.

An asset’s Age Consumed metric tracks the movement of its dormant coins. The metric offers insight into the behavioral shifts of an asset’s long-term holders. This cohort of coin holders rarely moves their dormant coins around. Therefore, it is noteworthy when they do because it often precedes a shift in market trends.

The Age Consumed Metric can be a marker of a price bottom. This occurs when a spike in the metric’s value is followed by an asset’s price rally.

Conversely, it is also an indicator of a price top. This occurs when the metric spikes and the asset’s price falls. A price top refers to an asset’s highest price before a sustained decline.

At press time, ADA trades at $0.32. Its value has declined by 17% in the past 24 hours. For context, the altcoin traded at $0.39 when its Age Consumed surged. This price level represents its local top.

ADA’s daily trading volume has surged by 23% during the same period. This creates a bearish divergence between the coin’s price and trading volume, hinting at the possibility of a continued price decline.

In the past 24 hours, ADA’s daily trading volume has totaled $707 million.

ADA Price Prediction: The Current Downtrend is Strong

ADA has been on a downtrend since the beginning of July. At its current price, the altcoin trades at a low last seen in November 2023.

ADA’s Aroon Down Line is 100%, confirming the strength of the current downtrend. This indicator measures an asset’s trend strength and identifies potential trend reversal points. When its Down Line is close to 100%, the downtrend is strong, and the most recent low was reached relatively recently.

If the bearish bias towards the altcoin continues to gain momentum, ADA’s value may dip to $0.31.