📊 3 Understated Signs Suggest Cardano ($ADA ) Price Risks Falling Below $0.70
Recently, Cardano (ADA) attempted to reach $0.80 but fell short, with its price now at $0.75. This decline has sparked concerns about its short-term prospects.
These concerns might be valid, especially as this on-chain analysis suggests that ADA could slip lower than it has in recent times.
🔸 Cardano Liquidity Concentration Goes Lower
The liquidation heatmap is one key indicator suggesting that ADA’s price could decrease. For context, the heatmap pinpoints price levels where large-scale liquidations might occur.
The indicator also identifies price levels with a high concentration of liquidity. When liquidity is concentrated in a specific area, it often signals that the price is likely to move toward that region. On the liquidation heatmap, this is represented by a color shift from purple to yellow, indicating higher liquidity.
Further, the one-week liquidation heatmap for Cardano reveals that the concentration has shifted to $0.69. Based on this observation, ADA’s price could potentially drop from $0.75 to $0.69 in the short term, aligning with the prevailing market conditions.
Another indicator supporting the potential decline in Cardano’s price is the drop in trading volume. On November 16, Cardano’s volume was nearly $6 billion. However, according to on-chain data from Santiment, it has since dropped significantly to $1.78 billion.
Trading volume measures investor interest by measuring the total value of tokens exchanged within a specific timeframe. Rising volume indicates heightened interest and activity, often leading to an upward price surge. Conversely, a decline in volume suggests waning interest. If reversed, this could have averted another Cardano price decrease.
Therefore, the notable drop in Cardano’s volume, combined with its recent price decline, signals reduced demand and increases the likelihood of further price depreciation in the short term.