Cardano’s digital token, ADA, has been experiencing a challenging period, with its value dipping roughly 12-15% recently, falling below the $0.6 mark for the first time in almost two months. At present, it hovers between the $0.59 to $0.60 range, a crucial support zone for this altcoin. While the wider crypto market isn’t in turmoil, ADA’s pricing appears to be running out of steam.
What’s Causing Cardano’s Price Dip?
One of the main culprits behind the falling price is the increasing bearish momentum visible on the technical charts. Technical indicators suggest the presence of strong downward pressure, which could persist unless there’s a significant influx of buyers. ADA is also demonstrating a potential falling wedge pattern, often a bullish reversal signal, but it remains unconfirmed. If the price falls below the current support, it may continue to the $0.57 or possibly $0.5 levels.
The chart above highlights ADA’s price stuck within a descending parallel channel while maintaining a key support zone. The price has once again reached this support zone between $0.6 and $0.61, however, signs of a positive rebound are minimal. Should the price fail to trigger a rebound, a drop to the next support at $0.51 seems plausible. Yet, a rebound could push levels to $0.65, though this appears doubtful as the RSI is nearing the lower limit. A fall into the oversold range could signify a continued bearish trend.
Profit-taking Among Long-term Holders
On-chain data highlights another concern: the ‘Age Consumed’ metric, tracking the movement of older coins not transacted for a significant period, has hit a 9-month high. This spike indicates dwindling investor confidence, as a rise in this metric suggests long-term holders are cashing out, potentially impacting ADA’s price negatively.
This action by long-term holders is troubling as markets, particularly Cardano, could face amplified selling pressure. This could make it increasingly difficult for ADA to regain positive momentum in the short term, maintaining the short-term targets. This might be a pivotal reason why ADA’s price is finding it hard to stabilize.
The Future of ADA’s Price
Is this merely a dip or a more severe issue? If Cardano can remain above the $0.6 mark, we may see a rebound towards $0.66 or even $0.70. But if that support breaks, $0.57 is the next defense line. A fall below that? Then $0.50 could become a reality sooner than expected.
ADA’s current price action is a blend of technical weakness, long-term holders selling off, and bearish trader sentiment. While it’s not a moment of panic, it is definitely a time to be vigilant.
