Cardano (ADA) price appears to be losing bullish momentum after a strong rally last week. The cryptocurrency slipped 3.59% on Tuesday, trading around $0.78, signaling potential profit-taking by holders following a 19% surge the previous week. On-chain data and technical indicators suggest a possible pullback toward the key support level at $0.71.
Key Takeaways
- Profit-taking intensifies as ADA holders capitalize on recent gains.
- Dormant wallet activity spikes, hinting at increased selling pressure.
- Technical analysis points to a retest of $0.71 support amid cooling momentum.
On-Chain Metrics Highlight Profit-Taking and Selling Pressure
Network Realized Profit/Loss (NPL) Spikes
Santiment’s NPL metric, which tracks average ROI across Cardano’s network, showed a sharp spike on Monday. This indicates holders are selling at significant profits, increasing downward pressure.
👉 Why Cardano’s NPL matters for price trends
Age Consumed Index Signals Bearish Sentiment
The Age Consumed index, which detects dormant token movement, recorded its highest spike since mid-April on Monday. Historical trends suggest such spikes often precede price declines as tokens move to exchanges.
Long-to-Short Ratio Reflects Bearish Bias
Coinglass data reveals ADA’s long-to-short ratio at 0.84—the lowest in over a month. A ratio below 1 indicates more traders are betting against ADA’s price.
Technical Analysis: ADA Faces Resistance and Potential Pullback
Resistance at $0.84
ADA’s rally stalled at $0.84, a key Fibonacci retracement level (50% from March highs). Failure to break this resistance may trigger a pullback toward:
- 200-day EMA support: $0.71
- RSI downtrend: Currently at 61, fading bullish momentum.
Bullish Scenario
A daily close above $0.84 could propel ADA toward:
- Next resistance: $0.92 (61.8% Fibonacci level).
FAQ: Cardano Price Dynamics
Q: Why is ADA’s price dropping after a rally?
A: Profit-taking by holders and renewed selling pressure from dormant wallets are key factors.
Q: What’s the critical support level for ADA?
A: $0.71 (200-day EMA), where buyers may re-enter.
Q: How does the Age Consumed index impact ADA?
A: Spikes signal dormant tokens moving to exchanges, often preceding price declines.
Q: Is the current market sentiment bearish for ADA?
A: Yes, per the long-to-short ratio (0.84), reflecting more short positions.
Final Thoughts
While Cardano’s recent rally showed promise, technical and on-chain data suggest caution. Traders should monitor the $0.71 support and $0.84 resistance for breakout or breakdown signals.
Disclaimer: This content is for informational purposes only and not investment advice. Always conduct independent research before trading.