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.