Cardano (ADA) market movements are marking a critical turning point for investors. On-chain data raises concerns about ADA’s sustainability. The weakening of bullish momentum and the reduction in holding periods are strong indicators of declining long-term investor confidence.
According to COINOTAG data, the divergence between price action and user activity points to fundamental weaknesses and warns that price increases are not sustainable. This suggests that Cardano’s recent rally may face challenges in sustaining itself, especially given the uncertainty and weakness in market conditions.
Recently, Cardano (ADA) has shown volatility, rising from $1.01 to $1.16. However, this recovery may be overshadowed by worrying trends in investor behavior and blockchain. While ADA has seen a significant increase, market analysts and traders warn caution. The decrease in holding periods suggests that investors are taking a short-term approach and selling their assets more quickly. Such behavior is often seen in bearish markets and reflects a lack of faith in sustainable price growth.
There are two important metrics to watch right now: Price-Daily Active Addresses (DAA) divergence and overall blockchain activity. The massive 134.26% drop in DAA divergence is alarming. This metric reflects active participation in the Cardano ecosystem; an increase in activity is usually seen alongside price increases. However, the decrease in user activity as ADA’s price increased suggests that the recent rally was not strong enough to provide the necessary support.
Such a divergence is usually a sign of a price correction, raising questions about the sustainability of the rise and increasing the likelihood of the market becoming volatile again. When we examine the price dynamics of Cardano, the Moving Average Convergence Divergence (MACD) indicator is currently showing a bearish signal. The negative reading of the MACD draws attention to the lack of bullish momentum. If ADA fails to regain its previous bullish trends, prices are expected to fall below $1, especially to $0.98. However, if there is a positive change in momentum, the ADA price could rise to a level between $1.33 and $2.
