The price of Cardano is currently seeing difficulties as a result of being overvalued and a lack of investor trust, indicating that it may require further time to recuperate from the recent Chang hard fork.
The Cardano Network Value to Transaction (NVT) ratio has recently achieved its highest level of the year at 6.43, suggesting the possibility of forthcoming difficulties. Overvaluation is generally considered a negative indicator, frequently resulting in corrections or delays in anticipated market upswings.
Prominent investors, such as large-scale crypto holders, have demonstrated minimal inclination to retain ADA, as they have divested a substantial percentage of their holdings, totaling more than $326 million, representing around 15% of the total supply.
This sell-off is in line with the ‘sell-the-news’ phenomena, which refers to investors taking advantage of the hype surrounding significant developments but then selling their investments once the event occurs. This typically results in market corrections.
Although the short-term prospects for Cardano’s price are unclear, there remains a possibility of a future rebound. The altcoin has been trapped in a descending wedge formation for more than four months, and it is uncertain when this pattern will terminate.
There is a possibility that the price of Cardano may decrease much more, potentially reaching a significant support level at approximately $0.31. This level has traditionally been an important point of price stability.
If the price of Cardano rebounds from this level of support, it has the potential to facilitate a breakout from its existing pattern, perhaps resulting in a substantial increase of 47%.
Nevertheless, in the absence of an improvement in overall market circumstances and investor sentiment, any additional decreases in value could undermine the optimistic-neutral perspective and prolong the postponement of Cardano’s anticipated surge.
