Cardano’s ADA has been experiencing a lackluster performance since May, with bulls remaining passive in the market. This has raised concerns among investors, especially during a distribution phase for ADA.
The price of Cardano has been on a downward trend since late May, despite a brief rally when Bitcoin surged from $76k to $111.6k in April and the first half of May. However, this rally only brought Cardano back to the lows of a nearly six-month-old range. The subsequent price decline has not been well received by investors, with many maintaining a bearish outlook on ADA.
Data from Santiment has shown a decline in development activity for Cardano since February, signaling a potential concern for long-term investors. The 90-day MVRV ratio has been positive for almost two months, indicating that holders of the last 90 days have been in profit despite the retracement. However, the share of holders in profit is decreasing rapidly, suggesting that any attempted recovery by ADA bulls could be met with selling pressure as holders look to exit at break-even or a slight profit.
Furthermore, the mean coin age is on a downtrend, indicating network-wide distribution of Cardano. This trend would need to change for Cardano to see a recovery in its price.
The market structure turned bearish on 30 May when Cardano dropped below the $0.71 level, with the next target being $0.51. A drop below $0.51 and a retest of that level as resistance could present a short-selling opportunity, targeting the $0.427 support level.
As of now, a bullish recovery is not in sight, with sellers dominating the market. A potential short-term range formation could indicate a bottom forming, but it would need to be accompanied by increased demand, such as an uptrend in the mean coin age metric.
In conclusion, Cardano’s ADA may continue to face challenges in the market as bulls remain passive and distribution concerns linger. Investors should closely monitor key metrics and market trends to make informed decisions about their ADA holdings.
(Source: Santiment)