The post Cardano (ADA) Price Plummets With 80% Addresses Seeing Red, But What Went Wrong? appeared first on Coinpedia Fintech News

The popular cryptocurrency Cardano (ADA) has faced significant challenges recently, with a large number of investors suffering losses. Read on to discover why and how this transpired. 

Loss-Making ADA Addresses

Data from analytics firm IntoTheBlock reveals that 80% of all ADA holders are currently “Out of the Money,” meaning they hold the token at a loss. This situation has impacted a total of 3.44 million addresses, holding a combined total of 26.85 billion ADA, equivalent to $9.48 billion at current prices.

It is notable that the majority of “Loss-Making” ADA is held by those who purchased Cardano tokens between $0.374 and $0.456 per token. There are currently 743,560 such addresses, holding 13 billion ADA. With a total market capitalization of $12.47 billion, only $1.66 billion worth of ADA are in profit.

Despite these challenges, the ADA price has managed to find support just above the 200-Day Moving Average (DMA) at around $0.35. Attempts by bears to push the price below this level have been unsuccessful, providing some hope for investors.

Cardano’s Blockchain Approaching Capacity

Cardano’s blockchain is nearing its maximum transaction processing capacity, and a transaction queue may soon form as demand for block space increases. This situation is reminiscent of the high transaction fees seen on the Bitcoin and Ethereum networks during the meme coin craze.

The Total Value Locked (TVL) in smart contracts on the Cardano blockchain is currently around $170 million, marking an increase of nearly 300% since the beginning of the year, according to data from DeFi Llama.

Future Outlook For ADA

Despite these current challenges, there is potential for ADA to retest its 200DMA in the $0.35 area. If this occurs, it could also test an uptrend that began in late December 2022. This potential rebound offers a glimmer of hope to investors who have suffered losses as ADA still remains very much in the red on its weekly and monthly charts.

Also Read: Cardano Price Prediction: 2023, 2024, 2025, 2026 – 2030