- The resistance at $0.53 could prevent ADA from recovering.
- Cardano’s volume dropped while its social dominance increased.
The value of Cardano [ADA] has fallen 18.45% since the beginning of the year, CoinMarketCap data shows.
However, AMBCrypto’s review of the price tracking platform showed that the price increased by 3.60% in the last 24 hours. This increase pushes the ADA back above $0.50.
Despite the increase, data on the chain revealed some interesting things that happened on the Cardano network. The first was with the 24-hour active addresses.
Activity takes a back seat
According to Santiment, active addresses increased to 45,000 on February 1. However, press time showed that the statistic had plummeted and stood at 40,400.
Active addresses show the number of wallets involved in incoming and outgoing transactions. While not always the case, a jump in active addresses is usually bullish for a cryptocurrency. Therefore, it can be assumed that Cardano is at risk of a short-term decline due to the recent decline.
Source: Santiment
However, the metric alone cannot determine whether the price of ADA would accelerate or not. This was why AMBCrypto decided to explore the price potential from a technical angle.
According to the ADA/USD 4-Hour chart, the token was around the same support level as on December 8. Recall that the price of ADA then rose to $0.64.
But this time it seemed different, largely due to the resistance at $0.53. For ADA to beat resistance, buying pressure must increase.
ADA could struggle to rise
Indications of the Moving Average Convergence Divergence (MACD) showed that the ADA value was negative. This implies that the momentum was bearish.
Also, the 12-day EMA (blue) was below the 26-day EMA 9 (orange). If these indicators hold, ADA may not repeat December’s upward trend.
Furthermore, On Balance Volume (OBV) was around the same point, indicating no buying pressure. In a very bullish case, the ADA could jump to $0.53 or $0.55.
However, signals from the indicators show that the price of ADA could either remain at $0.50 or fall below it.
Source: TradingView
In terms of volume, Santiment showed that the benchmark has declined. For example, Cardano’s volume was 586.31 million as of January 30. But at the time of writing this had fallen to 341.26 million.
This drop suggests that interest in ADA has waned. When related to the price action, the falling volume and rising price suggest that the token may soon become weak.
Read Cardanos [ADA] Price forecast 2023-2024
Furthermore, Cardano’s social dominance had risen to 2.95%. This means that there was a lot of discussion going on about the token. In terms of price, the high social dominance could be a sign of the local top.
Source: Santiment
As it stands, ADA’s bearish outlook outweighed its bullish outlook. Therefore, traders may have to wait a little longer before the ADA rises much higher.