ADA Price May Fall Despite Improvement in Cardano
Despite the improvements in Cardano , metrics on the chain show that ADA prices may decrease.Retail investors are losing interest in Cardano after Shelley began using the project’s mainnet. The sudden increase in ADA prices after Shelley’s was unsustainable and fell 34% after prices reached yearly highs.
If the ADA fails to hold above the critical $ 0.114 support level, it will likely continue to lose. The cryptocurrency was trading at $ 0.124877 at the time of writing.
There is a Pessimistic Look in the Short Term
While Cardano has increased by more than 20% in the past few days, on-chain measurements are pessimistic about short-term prices for ADA.
Cardano’s last price action was the result of Shelley’s launch on July 29. After Cardano founder Charles Hoskinson announced that the protocol was finally transitioning to the proof-of-stake consensus algorithm, ADA had hit an annual high of 182% before launch. Following Hardfork, excitement waned and ADA declined 34% to $ 0.102.
Since then, Cardano has recovered some of these losses, gaining 22% and settling at the $ 0.124 level. However, different in-chain measurements suggest that the bulls will have a hard time moving prices further.
IntoTheBlock’s “In / Out of the Money Around Price” (IOMAP) model estimates that $ 0.114 played an important role in Cardano’s trend. The trading history shows that falling below this price is the biggest obstacle for ADA. More than 12,000 addresses here had previously purchased more than 2 billion ADAs. This space can absorb some of the selling pressure from the fall and prevent Cardano from falling further.
However, if this support level breaks, then it could be disastrous for those betting on the upside. IOMAP shows that the next key supply level, strengthening the ADA’s uptrend, is around $ 0.085. If both are broken, ADA holders should expect their investment to drop by another 30%.
The downtrend in network growth is a red flag for price growth in the near future. Usually, the constant decline in network growth is a leading indicator of worsening prices. The lack of newly created addresses tends to affect regular token inflows and outflows in the network and therefore liquidity, so traders should be cautious, according to analysts.