The Price of Cardano Will Be Determined by These Factors in the Long Term
Contributor
- Cardano’s price consolidated at around $0.37, with fluctuations suggesting bearish momentum
- The rise in new adoption suggests growing interest in upcoming upgrades
Cardano is expecting a major network upgrade soon, which could lead to a price surge for ADA. In fact, the recent report from Cardano’s parent company Input Output Hong Kong (IOHK) highlighted advancements in smart contracts, wallet services, core technology, and more.
Hence the question: is ADA now on the verge of a breakout?
Market sentiment and price trends
Since January, Cardano’s active address percentages have been declining, while the price remained relatively stable until a sharp drop in May.
The rise in zero balance addresses from around late March correlated with the falling price. This implied that more holders were liquidating or abandoning their positions as the price fell on the charts.
Source: IntoTheBlock
The new adoption rate peaked in early February but experienced a sharp decline shortly after that was inversely related to the price movement until a sharp increase in new adoption occurred in June. This uptrend is obviously related to the upcoming updates and many in the community were also excited, as expected.
Although ADA has recovered on the charts, it has not been able to maintain its upward momentum. This is a sign of a continued downtrend and a cautious or even negative reaction from investors.
Source: CryptoQuant
Furthermore, the price of ADA has shown a tendency to consolidate around the $0.377 mark, with minor fluctuations indicating a lack of strong directional momentum.
The 50-period moving average (red line) seemed to act as resistance around the $0.385 mark, while the 200-period moving average (blue line) around the $0.376 mark acted as short-term support.
The MACD line and the Signal line also showed several crossovers. These crossovers were relatively close to the zero line on the charts, suggesting that momentum, whether bullish or bearish, was not particularly strong.
It is worth noting here that ADA’s decline on the price charts was accompanied by an increase in volume – which contributed to an increase in selling pressure.
Source: IntoTheBlock
the high percentage of addresses out of the money is a sign of widespread bearish sentiment and pressure on the price. Especially if holders decide to sell to limit losses when the price rises near its entry points.
If the upcoming upgrades improve ADA’s performance and utility, they could shift these proportions and move more addresses into the “in the money” category. In doing so, it could potentially drive the price higher and increase confidence in Cardano’s future returns.
