Cardano (ADA) Holders Sit Tight, Dampening Price Rally Hopes
Cardano’s long-term investors are holding onto their tokens, potentially hindering a significant price upswing for ADA in the short term. This is according to an analysis by AMBCrypto, which looked at on-chain data from Santiment.
Long-Term Holders Keeping ADA Out of Circulation
The Mean Dollar Invested Age (MDIA) is a metric that indicates the average age of coins in circulation. A decreasing MDIA suggests investors are moving their tokens, potentially for trading. Conversely, an increasing MDIA signifies long-term holders keeping their assets off the market.
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Cardano’s 90-day MDIA jumped to 269 on April 15th, reflecting a decrease in network activity. Historically, this trend has correlated with a stagnant ADA price.
Price Struggles at $0.50 Resistance
While the broader cryptocurrency market experienced a recent recovery, ADA’s price has found it difficult to break past the $0.50 psychological barrier. The analysis suggests that if the MDIA continues to rise, ADA might struggle to surpass this level and could even dip below $0.49 in the short term.
Mixed Signals from Other Metrics
However, the Mean Coin Age (MCA) paints a slightly different picture. A low MCA indicates new coin circulation, while a high MCA suggests a movement of older coins. Cardano’s historical price performance has shown a negative correlation with an increasing MCA, implying a potential price decline despite the recent bullish momentum.
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Technical Indicators Offer Conflicting Views
The Relative Strength Index (RSI) suggests a lack of strong buying pressure. While the indicator has risen on the 4-hour chart, its reading at 50.58 indicates that bulls aren’t fully in control.
The Exponential Moving Average (EMA) also presents conflicting signals. A “death cross” pattern, typically bearish, is currently present on the 4-hour chart. However, ADA has crossed above the 9 EMA, suggesting some bullish attempts to push the price higher.
Can ADA Reach $0.53?
If buying momentum increases, ADA might be able to break past the $0.50 resistance level. However, a stagnant RSI could lead to price fluctuations between $0.46 and $0.49.
Overall Outlook: Uncertain with Short-Term Resistance
The analysis highlights the challenges ADA faces in its price recovery. While there’s potential for a rise to $0.53, resistance around $0.50 and a lack of strong buying pressure could lead to another correction. The Elder Force Index (EFI), currently stalled, could offer further clues. An increase in the EFI might signal a breakout, while a decline could confirm a price drop.
In conclusion, Cardano’s price outlook remains uncertain in the short term. Long-term holder behaviour and broader market trends will likely play a significant role in determining ADA’s future trajectory.
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Dr. Olajide Samuel juggles the demands of medical studies with a passion for cryptocurrency. A seasoned blogger, Olajide shares his vast global knowledge of the crypto space, offering insights to enthusiasts. Despite his busy schedule, his commitment to crypto remains strong, and he actively seeks ways to contribute to its future.
