Cardano (ADA) Price Drops Over 18% Amid Declining Network Activity
On the weekly chart, Cardano price #ADA has decreased over 18% amid a broader crypto market crash. On-chain metrics indicate declining network activity.
Following a rally to $1.30 in early December, Cardano's price is currently at $0.88 due to notable sell-offs. While some holders anticipate a rebound, data from the In/Out of Money Around Price (IOMAP) indicator suggests challenges. Resistance exists at the $0.92 level, where 58,470 addresses hold 951.02 million tokens, outpacing the volume held in profit between $0.74 and $0.88. Low buying pressure may hinder upward movement.
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Source: IntoTheBlock
Cardano Network Activity Sees a Drop
Santiment reports a decline in Cardano's network activity, suggesting bearish sentiment. The 24-hour active address count fell from over 51,000 on December 16 to 32,700, indicating reduced engagement, which typically correlates with bearish price movements.
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Source: Santiment
On the daily chart, ADA's price has fallen below the 20-day EMA (blue), indicating a bearish trend, and is near the 50-day EMA (yellow), a critical support zone. A failure to maintain the $0.88 support could result in further declines to $0.77 or even $0.55. Conversely, a bounce back from $0.88 could lead to a rally.
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Source: TradingView
A Bullish Take on ADA
Analyst Ali Martinez highlights similarities between Cardano's current price movement and its previous market cycle. He notes that the ongoing correction resembles a significant pullback from 2020, which occurred after an initial bull rally.
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Source: Ali Charts
“Cardano $ADA is following an eerily similar pattern to its previous cycle. Back in 2020, the first major correction after the bull rally began happened at the very same time as the correction we are experiencing today,” noted the analyst.