Cardano’s 10% Price Drop Despite Increased Network Activity
The Bottom Line
Within just four days, Cardano (ADA) experienced a rapid roller coaster ride: From its peak at $0.48, the price plunged 10%. Despite an increase in daily active addresses, ADA couldn’t generate enough demand to stop the downtrend. What does this mean for the future of Cardano?
Cardano Price Development: An Overview
After ADA broke out of a descending triangle on May 2 and briefly rose to $0.48, the cryptocurrency lost 8% of its value in the following three days and is currently trading at $0.44. Despite a 15% increase in daily active addresses since May 3, indicating increased network activity, this momentum could not stop the price decline.
Analysis of Market Sentiments and Indicators
The analysis of market sentiments and key indicators such as the Relative Strength Index (RSI) and the Money Flow Index (MFI) shows that the market currently has a selling bias. The RSI is at 38.14 and the MFI is at 31.84, suggesting that the majority of market participants tend to sell their ADA holdings rather than accumulate.
Causes of Negative Sentiment
One reason for the negative sentiment around ADA could be the significant loss of value of almost 30% in the last month, making it difficult for day traders to make profits. A look at the ratio of transactions in profit to losses shows that more losses than profits were made in the last 30 days, further reinforcing investor caution.
Our Assessment
The recent developments at Cardano show how volatile the crypto market can be. Despite positive signs in network activity, demand falls short of expectations, which is further affected by the overall market sentiment and recent losses. Investors should be cautious and closely monitor market developments before making further decisions. It remains to be seen whether and how ADA can recover from this setback.
Sources: Santiment, CoinMarketCap
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