Cardano (ADA) is in danger of slipping below the critical $1 mark after days of volatile and choppy price action. Since the weekend, the altcoin has struggled to stabilize, hovering around the same price zone.
While ADA holders are hoping that the current volatile movement will end with a breakthrough, this on-chain analysis suggests otherwise.
Cardano's Short-Term Potential Faces a Setback
To start, the token price may face a decline due to signs shown by the Cardano Net Large Holder Flow. Net Large Holder Flow measures the activity of addresses holding between 0.1% and 1% of the circulating supply.
When net flow is high, it means that these addresses bought more tokens than they sold. On the other hand, a low net flow indicates an increase in distribution at the expense of accumulation. According to IntoTheBlock: Net flow of large Cardano holders has decreased by 142% in the past seven days.
This indicates that altcoin has faced heavy selling pressure during the mentioned period. Given this current situation, ADA price may not see a significant rebound in the short term. Instead, it is likely to decline.
In addition to the above metric, the number of ADA holders is another metric that indicates that the value of the token may decline. Typically, when the number of cryptocurrency holders increases, it indicates confidence in the short-term potential.
It also indicates increased demand, which could lead to an increase in price. On the other hand, a decrease in the number of holders indicates otherwise. In November, the number of Cardano holders was around 4.47 million.
However, as of this writing, the number has dropped to 4.40 million. The drop suggests that some ADA holders have profited from the massive price surge the token has seen since November. If this metric continues to decline, the value of altcoins could do the same.
ADA Price Prediction: Lower This Time
Based on the 4-hour chart, ADA price has fallen below the 20 and 50 exponential moving averages (EMA). The EMA tracks changes in the price of a cryptocurrency to gauge the trend.
If the price rises above the EMA, the trend is bullish. However, in this case, Cardano has dropped below the 20 EMA (blue) and 50 EMA (yellow). This drop indicates that the altcoin risks falling below the key support of $1.05.
If this is the case, ADA could slide to 0.95 in the short term. However, if bulls push the price above the mentioned indicators, the prediction will be invalidated. In this scenario, ADA could climb to $1.19 or more.