The price of Cardano (ADA) has fallen by around 18% over the past seven days, aligning with the broader market condition after a period of consistent bullishness. But beyond the price, activity on the Cardano network has also felt the impact.
This general decline around the project has raised concerns about the altcoin’s short-term performance. According to this on-chain analysis, these concerns may be valid.
Cardano faces major hurdle
On December 8, Cardano’s price surged to a yearly high of $1.22. But today, the cryptocurrency’s value has fallen to $0.88 due to significant selling. While ADA holders can anticipate a recovery in the short term, the In/Out of Money Around Price (IOMAP) shows that this could be challenging.
IOMAP is an indicator that identifies on-chain support and resistance. To do so, the indicator analyzes addresses currently in unrealized profits compared to those in losses. Typically, the higher the volume in a price range, the stronger the support or resistance.
According to IntoTheBlock, the main resistance for ADA is around $0.92. In this area, 58,470 Cardano addresses have accumulated 951.02 million tokens, which is higher than the token’s in-the-money position between $0.74 and $0.88.
Cardano In/Out of Money Around Price. Fonte: IntoTheBlock
If buying pressure remains low, ADA price may struggle to rise above its current price.
Data from Santiment supports this sentiment, highlighting a significant drop in activity on the Cardano network. On December 16, the number of active addresses in a 24-hour period was over 51,000, but at the time of publication, that number had fallen to 32,700.
An active address is defined as a wallet that has been involved in a successful transaction — either as a sender or receiver — within a given period. This metric serves as a strong indicator of daily user activity on the blockchain.
Cardano Active Addresses. Source: Santiment
An increase in active addresses signals higher user engagement, which is generally positive for price action. Therefore, the continued decline in this metric suggests a bearish sentiment around ADA.
ADA Price Prediction: Prolonged Correction Inevitable
From a technical perspective, the Exponential Moving Average (EMA) suggests that Cardano's price could continue to fall. EMA is an indicator that measures the trend around a cryptocurrency.
On the daily chart, ADA price has fallen below the 20 EMA (blue). A fall below the EMA suggests a bearish outlook. Furthermore, the token’s value is hovering around the same point as the 50 EMA (yellow).
This position indicates that Cardano is about to lose support at $0.88. If this remains the same, ADA’s price could decline to $0.77. In a highly bearish scenario, the altcoin’s value could drop to $0.55.
Cardano Daily Analysis. Source: TradingView
However, if activity on the Cardano network increases, this trend could change. In this scenario, the value of the cryptocurrency could jump to $1.33.
The post Cardano (ADA) Drop Raises 18% Alert Amid Weak Network Activity appeared first on BeInCrypto.
