Cardano (ADA) has seen a recent price decrease of about 18% over the past week, in line with the wider market trend of a downward movement following a period of steady growth. However, this decline in price is not the only cause for concern for the Cardano network, as network activity has also seen a decrease.
The drop in overall performance of the project has raised questions about how the altcoin will perform in the short term. The In/Out of Money Around Price (IOMAP) indicator shows that there may be some challenges ahead for ADA holders hoping for a quick rebound in price.
The IOMAP indicator looks at on-chain support and resistance levels by analyzing addresses currently in unrealized profits versus those in losses. According to IntoTheBlock, there is significant resistance for ADA around the $0.92 mark, with a large number of addresses holding tokens in this range. This resistance level could make it difficult for ADA’s price to recover quickly.
The decrease in buying pressure may lead to ADA struggling to rise above its current price level, potentially leading to a prolonged correction. Data from Santiment also supports this viewpoint, showing a decrease in Cardano’s network activity, which could indicate a lack of user engagement and a bearish sentiment surrounding ADA.
From a technical analysis perspective, the Exponential Moving Average (EMA) suggests that Cardano’s price may continue to decline. The token has fallen below the 20 EMA on the daily chart, indicating a bearish trend, and is approaching the 50 EMA as a potential support level. If ADA fails to hold above $0.88, it could drop further to $0.77 or even $0.55 in a highly bearish scenario.
However, an increase in network activity could change this bearish outlook for Cardano, potentially pushing the cryptocurrency’s price back up to $1.33. Investors should conduct their own research and seek professional advice before making any financial decisions based on this information. The market conditions are subject to change, and accuracy and unbiased reporting are priorities for BeInCrypto.
