Cardano (ADA) has been on a downtrend over the past few days, with its price dropping by 7%. While this decline reflects broader market pressures, it also creates opportunities for ADA holders.
The current condition of cryptocurrencies has the potential for a bullish reversal, sparking optimism among investors.
Cardano has a chance
Cardano’s 30-day market value to realized value (MVRV) ratio shows that investors who bought ADA last month faced an average loss of 15%. However, this downturn pushed the MVRV ratio into the opportunity zone, ranging between -13% and -26%. Historically, this range marks a turning point in recovery.
This is the first time in four months that ADA’s MVRV ratio has fallen into this key area, signaling a possible bottom. Previous moves into this area have been followed by sharp price rallies. As ADA enters this phase, investors are watching the altcoin closely for signs of upward momentum.
Cardano MVRV ratio.
Cardano’s realized profit metric is not currently seeing a significant spike, suggesting that investors are holding back on profit-taking. This behavior is crucial as it helps reduce market volatility and removes the immediate threat of a sharp correction due to excessive selling activity.
As profit-taking decreases, the market has a chance to stabilize, giving investors more room to accumulate ADA. This phase of reduced volatility sets the stage for a potential price rebound. A continued lack of profit-taking peaks could pave the way for continued upward momentum in the short term.
Cardano is profitable.
ADA Price Prediction: Seeking Recovery
Currently trading at $0.89, Cardano is currently hovering above its critical support level of $0.87 after experiencing a massive 7% drop in the past 24 hours. The cryptocurrency’s ability to sustain above this level will be crucial to maintaining bullish sentiment in the short term.
If these positive indicators serve as a rebound, ADA could recapture the $1.00 mark that it recently broke below. Converting this resistance level into support would signal renewed strength for Cardano, pushing the price further back towards $1.23 and attracting more investor interest.
Cardano Price Analysis.
However, failure to sustain above $0.87 could result in further declines. A break below this level could push ADA down to $0.77, invalidating the bullish thesis and potentially initiating a bearish phase.
