Cardano (ADA) is at risk of falling below $1, having recently shown volatile price movements. The popular altcoin has been trading in the same price range for a while now. While ADA investors see this fluctuation as a positive bullish signal, onchain analysis paints a different picture.
Cardano’s short-term decline could be linked to a decline in net flow data from large investors. Net flow measures activity from addresses holding between 0.1% and 1% of the circulating supply. Increasing net flow indicates that these addresses are continuing to buy and is generally interpreted as a positive sign. However, a decrease in net flow indicates more selling and increasing selling pressure on the market.
According to IntoTheBlock data, Cardano’s major investor net flow has dropped by 142 percent in the past seven days. This suggests that ADA has been under intense selling pressure for a period of time. Therefore, the price of ADA may trend downward in the short term.
Another negative indicator is the decrease in the number of ADA investors. An increase in the number of investors indicates that the trust and demand for the asset is increasing, which can trigger a price increase. However, a decrease in the number of investors can be an indicator of decreasing demand and confidence.
While the number of ADA investors was approximately 4.47 million in November, this number has now decreased to 4.40 million. This decrease indicates that some ADA investors have sold their assets since November, making a profit. If this decrease in the number of investors continues, the price of ADA may also be negatively affected.