Today, on December 22, 2024, the cryptocurrency market as a whole is facing some challenges, with Cardano (ADA) being particularly vulnerable to a potential price decrease after showing signs of a bearish price action pattern. In the midst of this slightly bearish market sentiment, traders and investors are showing reluctance to engage with this altcoin, as noted by the on-chain analytics firm Coinglass.
Upon examining recent on-chain metrics in conjunction with technical analysis, there are mixed signals regarding the future of Cardano (ADA). While long-term holders appear to be optimistic, as indicated by significant outflows from exchanges, technical patterns suggest the possibility of short-term bearish trends.
Technical Analysis and Projected Levels for Cardano (ADA)
As per CoinPedia’s technical analysis, ADA is currently displaying bearish tendencies as it has successfully broken down from a head-and-shoulders price action pattern and recently retested that level. The retest of the breakdown level has partially confirmed the potential for a price decline in ADA.
Based on technical analysis, there is a likelihood that the altcoin could experience a 15% drop to reach the next support level at $0.80. If this bearish sentiment persists, ADA could easily reach the projected target.
Optimistic On-Chain Metrics
Despite the bearish technical outlook, long-term holders of ADA seem to maintain a positive outlook, as highlighted by Coinglass. Data from ADA spot inflow/outflow indicates a significant outflow of $200 million worth of ADA from exchanges in the past week, with no inflows recorded during this period despite a noticeable price decrease.
This trend reflects the movement of assets from long-term holders’ wallets away from exchanges, suggesting a bullish sentiment among investors who are accumulating tokens amidst the price downturn. This could potentially lead to an upward momentum and present an attractive buying opportunity.
Current Price Momentum
At the time of writing, ADA is trading close to $0.89, with a price decline of over 5.5% in the past 24 hours. Concurrently, its trading volume has decreased by 45%, indicating a decreased level of engagement from traders and investors in light of the ongoing price decline.
Overall, while Cardano (ADA) may be facing some short-term challenges, the optimistic on-chain metrics and potential buying opportunities suggest that there could be a silver lining for this altcoin in the near future. Investors and traders will need to closely monitor the market developments to make informed decisions regarding their ADA holdings.