- Decline in large transaction volume
- Impact on price and MVRV ratio
- Technical analysis suggests further drop
Cardano (ADA) finds itself at a critical juncture as recent data suggests market dynamics shifts that could affect its short-term outlook.
Decline in large transaction volume
Just two days ago, it seemed that the cryptocurrency was poised for a rally to $0.40, but this bullish scenario dimmed following a noticeable retreat by large holders. The large transaction volume, a key metric for institutional and whale activity, has experienced a decline. From a peak of 19.50 billion ADA on September 16, the volume has dropped to 18.44 billion, indicating reduced major holder engagement.
Impact on price and MVRV ratio
As whale interest wanes, ADA's price has followed suit, declining from $0.36 over the weekend to $0.33 at press time. This price decrease has impacted the Market Value to Realized Value (MVRV) ratio, a crucial indicator of unrealized profits or losses among holders. The one-day MVRV ratio has plummeted from -39% on Monday to -61.25% currently, suggesting that a growing number of ADA holders are facing increased difficulties in realizing gains.
Technical analysis suggests further drop
Technical analysis further corroborates the bearish narrative surrounding ADA. The Awesome Oscillator (AO), a momentum indicator comparing recent price movements to historical ones, has shifted into negative territory after being positive on September 15. This transition signals a potential loss of bullish momentum and could foreshadow further downside. Additionally, ADA’s failure to breach the $0.34 level reinforces the prevailing bearish bias. Given these technical and on-chain indicators, the likelihood of a substantial upward move appears limited in the short term. Instead, market participants should be prepared for a potential decline towards the $0.30 support level.
In summary, recent changes in whale activity and technical indicators point towards a potential further decline in the price of Cardano (ADA), posing challenges for its holders.
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