For some investors, Cardano's recent drop below $1 may seem catastrophic. However, ADA enthusiasts appear unfazed by the slight decline as on-chain data suggests they may be gearing up for a new sustained uptrend.
Check out the detailed analysis explaining how things could unfold for the altcoin.
Cardano Investors Are Bullish
Cardano price has been fluctuating at $0.98 after initially rising to $1.15 recently. This slight devaluation may be linked to the broader market decline, which saw Bitcoin (BTC) fall below $95,000.
However, data from Coinglass reveals that ADA’s Spot Inflow/Outflow is at -$40 million at the time of writing, down from $63 million on Monday, November 25. This indicates that Cardano enthusiasts have withdrawn around $100 million from exchanges in just two days.
Typically, when holders withdraw tokens from exchanges, it suggests that they do not plan to sell, which could create upward pressure on prices. Conversely, an increase in inflows would indicate that holders are willing to sell, potentially leading to a price drop.
Cardano Spot Inflow/Outflow. Source: Coinglass
Therefore, if exchange outflows continue to increase, then Cardano's price may recover in the short term. Another indicator that predicts such a movement is the Average Invested Dollar Age (MDIA).
MDIA is the average age of all tokens on a blockchain weighted by the average purchase price. When it increases, it means that most tokens have remained stagnant. Thus, this makes it challenging for prices to move significantly.
However, for Cardano, the 90-day MDIA has declined significantly, suggesting that trading activity for previously dormant coins has increased. If maintained, ADA could find it relatively easy to trade higher as long as buying pressure increases.
Average Age of Cardano Invested Dollar. Source: Santiment
ADA Price Prediction: Uptrend Set to Continue
The 4-hour chart of ADA shows a bullish flag forming, a bullish pattern consisting of two rallies separated by a short period of consolidation.
The pattern begins with a sharp spike in price, called a flagpole, driven by strong buying pressure. This is followed by a pullback, creating the flag, a rectangular shape with parallel trendlines. A bull flag usually signals that after consolidation, the price is likely to resume its upward movement once the pattern breaks out.
Cardano 4-Hour Analysis. Source: TradingView
Considering the current scenario, Cardano enthusiasts may push the price above $1.15. If that happens, then ADA is likely to rally towards the $2 mark. On the other hand, if the selling pressure increases, the price may drop to $0.85.
The article Cardano: US$100 million withdrawal from exchanges points to rise in ADA was first seen on BeInCrypto Brasil.
