Cardano has dropped by double digits in value over the past week. It is currently trading at $1.04, recording an 11% price drop over the period.
The drop in the price of ADA is attributed to a significant decrease in holding time and an increase in selling activity by large investors or whales, as well as a general decline in trading activity in the broader cryptocurrency market.
Cardano holding period decreases and stakes are reduced by large holders
BeInCrypto’s analysis of Cardano’s on-chain activity reveals a sharp drop in holding time for traded coins over the past week. According to IntoTheBlock data, this metric has dropped by 48% during the period under review.
Holding time measures the average length of time that tokens are held in wallets before being sold or transferred. When this metric falls, it indicates increased selling pressure among market participants.
This often indicates a decline in confidence or a shift in market sentiment towards the asset. Therefore, a decrease in the holding time of ADA among its investors puts it at risk of extending its price decline in the short term.
Furthermore, ADA whales significantly reduced their accumulation of tokens during the week under review, as evidenced by the 134% drop in net large holder inflow recorded during that period.
Large holders refer to addresses that hold more than 0.1% of the circulating supply of an asset. Their net flow measures the difference between the coins they buy and sell during a given period.
A decrease in net inflow of large holders of an asset indicates that large investors or whales are reducing their inflows into holdings, indicating a decrease in accumulation and an increase in selling activity. This reflects a cautious or bearish sentiment among influential market participants, which may affect the stability of the asset’s price.
ADA Price Prediction: Bears in Control
The Balance of Power (BoP) indicator for ADA on the daily chart confirms this bearish outlook. As of writing, the indicator is -0.34. The BoP indicator measures buying power versus selling pressure in the market, helping to identify potential trends and reversals.
:A BoP value of less than 0 indicates that sellers are dominating the market, indicating a bearish sentiment and potential downward price movement. If the bearish sentiment strengthens, ADA price may drop below the $1 mark and trade at $0.92.
On the other hand, if the momentum turns bullish, ADA price may break the $1.07 resistance level and reclaim its two-year high at $1.32.
