Despite a recent price drop, Cardano (ADA) has shown resilience against Bitcoin, outperforming it slightly in recent trading. However, mixed indicators suggest that ADA may face further downside potential as it struggles to break above key resistance levels.
Cardano's Struggle with Key Resistance Levels
Cardano's price has been grappling with key moving averages that are currently acting as resistance points. The much-anticipated Chang hard fork upgrade failed to generate the expected price volatility, leaving ADA in a precarious position. Bitcoin’s price volatility on August 14 caused ADA to dip, but the asset managed a quick recovery. However, spot trading data reveals a bearish sentiment surrounding ADA, exacerbated by a stagnant user base.
Mixed Indicators Impacting ADA’s Performance
Over the last 24 hours, ADA's price dropped by 1.1%, trading at $0.337. Despite this decline, ADA has performed well against Bitcoin, gaining 3.8% relative to the leading cryptocurrency. This trend is mirrored across the market, with XRP gaining 2.8% and Solana rising 4.3% against Bitcoin.
A closer examination of Cardano’s network and trader behavior reveals underlying weaknesses. Despite the buzz around the Chang hard fork, key metrics suggest that the network is in a challenging state. According to IntoTheBlock, the number of active addresses with balances has remained stagnant at around 4.45 million for over a year, reflecting a lack of network growth.
Interestingly, despite this stagnation, the number of long-term holders has reached an all-time high, with over 40% of ADA’s total supply being held by these investors. This indicates a high level of confidence in Cardano’s future, which could be seen as a bullish sign.
However, traders appear less optimistic. Data from Coinglass Liquidation Map shows a bearish sentiment, with cumulative long liquidation leverage at $2.28 million, lower than the cumulative short liquidation leverage of $3.05 million on August 14. This imbalance suggests that traders are expecting further downside for ADA, as they anticipate continued pressure on the price, possibly influenced by the U.S. government’s movement of Bitcoin from the Silk Road wallet.
This sentiment is reinforced by the fact that ADA is hovering close to a key resistance level at $0.34, where significant selling pressure has been observed.
ADA Price Forecast: Watching the $0.30 Level
Cardano’s price is currently in a downtrend, with immediate support likely around $0.31 and the psychologically significant level of $0.30. The narrowing Bollinger Bands suggest a period of reduced volatility, which could lead to a breakout from the current rising channel and a subsequent expansion of these bands.
The Moving Average Convergence Divergence (MACD) indicator remains negative, signaling continued bearish momentum. A potential bullish move could be indicated by a crossover of the MACD line above the signal line, but this has not yet occurred. Additionally, the Chaikin Money Flow (CMF) indicator shows mild buying pressure at 0.08, but it is not strong enough to suggest a reversal.
Conclusion
In summary, despite a 21% gain over the past two weeks, Cardano continues to face downward pressure due to bearish trader sentiment and stagnant network growth. The price could drop to the $0.30 level, which may present a potential buying opportunity for a rebound. However, the overall outlook remains cautious, with traders and investors closely watching key support and resistance levels for signs of the next move.
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