- ADA hit a key support zone on the chart, with the potential to repeat a historical move that could take it to $1
- A massive decline in investors on Cardano’s chain hinted at weakening market sentiment
Cardano’s [ADA] performance over the past 24 hours, with a decline of 1.23%, seemed to be in sharp contrast with its 9.09% rally over the past month.
However, AMBCrypto’s analysis revealed that this price decline won’t be a definitive sign that the market will continue in this direction. In fact, other factors may be influencing the altcoin’s price trend too.
Is ADA primed for a rally?
At the time of writing, ADA was trading into a key ascending support line on the 1-day chart – Typically a signal that a rally may begin soon.
If ADA’s price follows its past behavior at this support level, the asset could see a 30.54% hike to approximately $0.96.
Source: Coinglass
Should the momentum strengthen, ADA may have enough catalysts to push it towards reclaiming the $1-level again.
However, if the price fails to hold this level, it could mark the first time ADA breaks below the ascending support, potentially falling to the pattern’s starting point at $0.558.
Will spot traders lead the way?
Lately, Spot traders have supported the asset with consistent buying activity. In fact, according to Coinglass’s data on liquidity inflows and outflows, more ADA has flowed out of exchanges than in.
These net outflows supported a bullish outlook for the altcoin, especially as they suggested that traders may be moving ADA into private wallets for long-term holding.
Source: Coinglass
Over the past week, $57 million worth of ADA was scooped from the market – The highest weekly purchase since 3 March. In the last 24 hours alone, $3.36 million was bought from the market, adding to the bullish potential.
Worth noting, however, that Cardano has also lost its appeal to a significant portion of its investor base.
Are investors flocking away?
The number of unique investors on the Cardano blockchain, where ADA is native, has dropped significantly.
According to Artemis, the count of active addresses—representing active investors—has declined by 40,000 on the charts.
Source: Artemis
For example – On 23 Mat, there were 60,600 active traders on-chain. At press time though, that number had fallen to 20,600.
Such a decline could be a sign of waning interest in trading on Cardano, something that negatively affects the asset’s price.
In fact, the Futures market highlighted this shift, underlining a hike in selling activity during this period. The Taker Buy/Sell Ratio was below 1 with a reading of 0.9531 too, confirming bearish sentiments across the market.
Where is ADA heading next?
Finally, the altcoin’s liquidation heatmap revealed that ADA was stuck between two significant liquidity levels on the chart – Around $0.78 and $0.74.
Source: Coinglass
Liquidity levels attract price action. With ADA trapped between them, it would mean that the asset could move either higher or lower.
A decisive move will require a clearer indication from either buyers or sellers.
