The total volume of large transactions recorded on the Cardano (ADA) network was $45.41 billion seven days ago. Today (29), the same volume fell to $26.34 billion, suggesting that large investors have reduced their exposure to the cryptocurrency.
Sometimes situations like this suggest that the altcoin's price could be negatively affected. Will this be the case for the ADA?
Cardano Sees Drop in Key Areas
Large transactions track activity from institutional players and whales executing trades above $100,000. An increase in this metric suggests increased engagement from these key players. Conversely, a decline usually indicates that institutions or whales may be liquidating their holdings. In the case of Cardano, large transactions have fallen by $19 billion over the past six days.
Historically, the price of ADA has often risen along with an increase in large transactions. For example, the image below shows an increase in the metric between November 16th and November 23rd.
During this period, the altcoin’s value rose from $0.57 to $1.09, suggesting that whales played a major role in the rally. Therefore, if the current decline continues, the asset could face further bearish pressure.
Cardano Large Transaction Volume. Source: IntoTheBlock
Large transactions aren’t the only aspect of the Cardano ecosystem currently in decline. According to data from Santiment, overall network activity has also dropped significantly.
On-chain metrics such as active addresses are key indicators of network health. Active addresses refer to users who have interacted with the cryptocurrency and continue to engage in transactions. Over the past seven days, active addresses on Cardano have been decreasing, indicating a declining user share.
Cardano Active Addresses. Source: Santiment
Price Prediction: Dropping to $0.82?
ADA is trading around $1.04. However, the Relative Strength Index (RSI) has a reading of 76.91. Considering the current scenario, it seems that ADA price is overbought, and a decline could be next.
Bollinger Bands (BB) — an indicator that measures volatility, also validates this bias. BBs, like RSI, also assess whether an asset is overbought or oversold. When the upper band of the indicator touches the price, it is overbought.
But when the lower band hits the value, it is oversold. With the upper band of the BB close to hitting the ADA, the price could drop to $0.82.
Cardano Daily Analysis. Source: TradingView
However, if Cardano’s large transactions increase, this may not happen. Instead, the cryptocurrency’s value could rise above $1.15.
The article Cardano Suffers Drop in Large Transactions: Will Price Do the Same? appeared first on BeInCrypto.
