Despite an undeniable past performance of bullish trends and dizzying price spikes, the Cardano (ADA) market has experienced a bearish rally that shows no signs of slowing down. This unprecedented downturn has left many investors struggling to understand the situation and predict the next ADA price target.
Cardano: The falling tide
Cardano, a third-generation blockchain platform with a unique proof-of-stake consensus mechanism, has shown an impressive trajectory in recent weeks. However, recent market trends are in stark contrast to its past glory. The ADA Token is sliding down the slope with no signs of immediate recovery.
New insights from IntoTheBlock, a renowned data analytics firm, reveal a worrying trend among Cardano (ADA) investors. The company’s recent report indicates that a substantial 80% of ADA holders, comprising 3.44 million addresses, are currently “underwater” as their holdings are worth less than the price at which they were purchased.
These investors collectively hold 26.85 billion ADA, which translates to a staggering $9.48 billion at current market value. This unfortunate circumstance makes Cardano the ninth most important cryptocurrency with a market cap of more than a billion dollars, measured by the ratio of loss-bearing to profitable addresses.
Sebastien Guillemot, the co-founder and CTO of blockchain company dcSpark, shared on Twitter that Cardano is currently 94% up and running. This means there is only a 6% window before it reaches full capacity.
He warned his Twitter followers that no Cardano node uses transaction prioritization, which indicates that transactions are handled on a first come, first served basis. Consequently, if Cardano’s load reaches 100%, all transactions will be queued with others. This could result in more price drops for the ADA token in the coming days.
What’s next for the ADA price?
The value of Cardano (ADA) is deviating significantly from a key pattern on the daily chart and is threatening to drop below a vital support threshold.
If this happens, it indicates an extremely bearish trend in the price of ADA. Such an event is expected to accelerate the currently observed downward trend.
Over the past week, Cardano’s value made several attempts to surpass the $0.4 resistance level, but the upside momentum was unsuccessful, sending the price falling below the $0.38 support.
The price fell further and fell below the $0.37 and $0.36 support levels. Finally, it reached the $0.35 support level. A bottom has been set around $0.3509, and currently the price is trying to drop further due to BTC’s price drop below $28K.
At the time of writing, the ADA price is trading at $0.354, with a 4.73% downtrend in the past 24 hours. If bulls fail to send the price above EMA-20 to $0.354 on the 4-hour price chart, Cardano will move into a more downtrend. A breakout below $0.34 will drop the token near the $0.31-$0.32 support area.