Cardano (ADA) Risks Decline to Long-Term Support Level

5 months ago 6

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Cardano’s (ADA) decline in the last week has caused its price to fall below its 20-day exponential moving average and 50-day simple moving average, confirming the drop in buying pressure.

As the altcoin’s value seeks new lows, further downward pressure on its price may cause it to trade at the long-term support level of $0.42.

Cardano’s Traders Look the Other Way

Since it peaked at $0.51 on May 21, ADA’s price has trended downward. As of this writing, it is exchanged at $0.45, and its value has since dropped by 11%.

The double-digit decline in ADA’s price in the last week is due to the low demand for the altcoin. On-chain data revealed that during the period under review, the daily count of active addresses that completed transactions involving ADA fell by 17%.

Apart from a decline in its active address count, new demand for the altcoin also dropped during the period under review, cratering by 22%.

Last week’s drop in demand for ADA reflects the overall downtrend in the cryptocurrency market, contributing to the coin’s plummeting prices. The global cryptocurrency market capitalization has decreased by 2% in the past seven days.

The week under consideration was also marked by a fall in ADA whale activity. During that period, the number of daily ADA transactions worth above $100,000 that were completed fell by 69%.

A decline in an asset’s whale activity is significant because it often signifies that large investors are losing confidence in its prospects. This lack of whale interest might discourage other investors, leading to an extended period marked by a price decline.

ADA Price Prediction: No Place to Hide From the Bears

ADA’s Elder-Ray Index showed a negative value at press time and has consistently remained negative since May 23. This indicator measures the relationship between the strength of buyers and sellers in the market.

When it dips into negative territory, it signifies that the bull power is weakening while the bear power might be strengthening. This suggests that sellers are exerting more control over the price than buyers.

The decline in buying pressure in the ADA market was confirmed by its falling Accumulation/Distribution A/D) Line. At 48.45 billion at press time, the value of ADA’s A/D Line has dropped by 0.3% since May 20.

The decline in ADA’s price and its A/D Line strengthens the confirmation of a downtrend already in motion. The indicator indicated that selling pressure was high, supporting the price decline.

If this decline continues, ADA’s price might fall to $0.44 or even crash to $0.42, which has formed a long-term support level for the altcoin.