Cardano (ADA) has seen steady gains over the past two weeks, reaching its highest value in two years on November 16 before experiencing a slight pullback. It is currently trading at $0.75, marking a 5% decline since its peak.
An analysis of its on-chain and technical indicators suggests that this bearish trend could continue, potentially hampering its ability to reclaim $1 — a milestone last achieved in 2022.
Holders Sell ADA to Gain Profits
ADA net inflows on exchanges have shown a considerable increase, indicating profit-taking activities. According to data from Coinglass, the altcoin recorded net inflows totaling $7.21 million on Monday (18).
In this sense, the higher flows on exchanges suggest that holders are transferring their assets to these platforms to sell, leading to increased selling pressure and a downward price movement.
Cardano Exchange Flows. Source: Coinglass
Furthermore, the drop in daily trading volume confirms this bearish outlook. While the altcoin’s price is up 7%, its trading volume has dropped 57% during this period.
When an asset’s price rises while trading volume decreases, it suggests that fewer buyers are participating in the market, and the upward momentum may not be as strong as it seems. This indicates that market participants are losing interest or are lacking conviction, as many prefer to sell to take profits.
Cardano Price and Trading Volume. Source: Santiment
In fact, ADA transactions have been significantly profitable. According to data from Santiment, the daily on-chain trading volume ratio in profit to loss currently stands at 3.35, its highest single-day value since June 2020.
This means that for every ADA trade that results in a loss, 3.35 trades generate a profit. This high profit-to-loss ratio signals a potential selling opportunity for traders looking to lock in gains. This could increase selling pressure on the coin’s price.
ADA Transactions in Profit to Loss Ratio. Source: Santiment
Read more: How to Buy Cardano (ADA) and Everything You Need to Know
Price prediction
Cardano is currently trading at $0.75. If buying pressure continues to ease, the cryptocurrency’s price could decline further, seeking support at $0.69.
The inability of the bulls to defend this level could push the asset further down, potentially to $0.61.
Cardano Price Analysis. Source: TradingView
Read more: How to Buy Cardano (ADA) and Everything You Need to Know
On the other hand, a shift in market sentiment and renewed demand could see ADA reclaim its $0.81 high and move beyond it.
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