- ADA’s on-chain metrics reveal bearish divergence, signaling potential profit-taking and challenging short-term prospects for Cardano.
- Market Value to Realized Value (MVRV) ratio drops, suggesting recent ADA investors selling and realizing profits.
- Support and resistance levels are crucial as Cardano faces heightened volatility amid profit-taking behavior and corrections.
In the latest market developments, Cardano (ADA) has witnessed a significant sell-off, erasing its weekly gains and dropping to $0.3617 early on Tuesday. The bearish sentiment is driven by on-chain metrics indicating potential profit-taking by ADA traders.
Cardano’s active and new addresses have exhibited a bearish divergence between November 2 and 11, while the ADA price climbed. This divergence suggests a disconnect between price action and network activity, raising concerns among traders and investors. The decline in active and new addresses during a price increase often signals weakening support for the asset.
The Market Value to Realized Value (MVRV) ratio is a crucial metric contributing to the bearish outlook. The MVRV, a measure of the average profit/loss of investors who purchased ADA in the past month, peaked at 18.61% on November 10 but dropped to 8.68% on November 14. This indicates that traders who acquired ADA within the last thirty days have been selling and realizing profits, adding to the potential downward pressure on Cardano’s price.
The Global In/Out of the Money (GIOM) indicator by IntoTheBlock reveals that 52.31% of addresses, holding a total of 17.99 billion ADA tokens, are currently in profit. This suggests that a significant portion of ADA holders may be considering selling their assets, contributing to the overall bearish sentiment.
Cardano’s immediate price levels indicate potential support between $0.34 and $0.36, where 203,390 addresses have accumulated 1.79 billion ADA tokens. Conversely, resistance is expected between $0.36 and $0.37, with further challenges at $0.37 to $0.38, where 53,610 addresses acquired 2.2 billion ADA tokens.
Cardano is trading at $0.3585, reflecting a 3.37% decrease. The market cap is $12,644,529,611, making ADA the 8th largest cryptocurrency by market capitalization. The 24-hour trading volume is $420,778,406, securing the 21st position in the crypto market. Analyzing the data, Cardano’s on-chain metrics reveal a bearish divergence, raising concerns among traders and investors. The Token Summary indicates that only 29% of holders are making profits at the current price, while 66% are out of the money, potentially contributing to a sell-off.
Thus, the combination of bearish on-chain metrics, profit-taking behavior, and market corrections suggest a challenging path for Cardano in the short term. Traders and investors are advised to closely monitor key support and resistance levels as Cardano navigates through this period of heightened volatility.
Traders and investors are advised to monitor these on-chain metrics closely as Cardano navigates a potentially corrective phase. The support levels at $0.34 and $0.36 will be crucial indicators of ADA’s short-term price trajectory, while overcoming resistance at $0.37 could pave the way for a bullish reversal.