On Wednesday (11), the price of Cardano (ADA) fell to $1.01, but rose approximately 15% in 24 hours. This increase rekindled hopes among holders of the altcoin, suggesting that it could maintain the upward trend.
However, recent data on the blockchain indicates that this may not be the case.
Cardano investors are wary
Cardano has been one of the top altcoins among major cryptocurrencies over the past 30 days. During that time, the token rose to a two-year high of $1.25 before cooling off and rising again yesterday.
However, there are two main reasons why this Cardano price surge may not last. First, the holding time of transaction coins has decreased significantly. As the name suggests, holding time measures the time a cryptocurrency has been held without being sold.
When it increases, it means that holders are holding on to their assets. On the other hand, a decrease indicates the opposite, which is the case for the altcoin. If this trend remains the same or continues, then the price of ADA may find it challenging to hold on to $1.16.
Cardano Holding Time. Source: IntoTheBlock
Second, the divergence between price and Daily Active Addresses (DAA) further suggests that Cardano’s rally may be short-lived. This metric measures the relationship between on-chain activity and price movement.
Typically, a price increase can attract more investors, boosting demand and appreciation. Similarly, an increase in active addresses usually signals increased investor interest, which is positive for the cryptocurrency.
However, data from Santiment shows that Cardano’s price-DAA divergence has plummeted by 134.26%. This indicates that while the altcoin’s price has increased, active addresses have decreased — a bearish sign suggesting that the rally may lack support. As a result, ADA could face a possible pullback.
Cardano DAA Price Divergence. Source: Santiment
ADA Price Prediction: Below $1 Again?
Indicators on the ADA/USD daily chart appear to support this bearish outlook. A key indicator supporting this thesis is the Moving Average Convergence Divergence (MACD). The MACD uses the difference between the 12-day and 26-day Exponential Moving Average (EMA) to measure momentum.
When the reading is positive, the momentum is bullish. But in this case, the MACD reading is negative, suggesting that the momentum around the token is bearish. Considering the current condition, Cardano’s bullish price surge that took it to $1.16 may find it challenging to extend.
Cardano Daily Analysis. Source: TradingView
In this scenario, the ADA price could drop to $0.98. However, if the momentum turns bullish, the bulls could pave the way for a rally. If that happens, the coin could jump to $1.33 and possibly move towards the $2 mark.
The article Cardano (ADA) Forecast: Could 15% rally be nearing an end? was first seen on BeInCrypto Brasil.
