Cardano’s market capitalization has returned to the $6 billion mark after a brief decline. According to CoinMarketCap data at the time of writing, ADA is trading at $0.165, which brings its total market value precisely to $6 billion.
Inflation data offers limited support
On Wednesday, the cryptocurrency market saw a modest recovery. The release of US inflation data in line with expectations reinforced investor belief that the US Federal Reserve may keep interest rates unchanged at its June 17 meeting. Nonetheless, the possibility of another rate hike before the end of the year remains on the table.
Figures from the US Bureau of Labor Statistics show the Consumer Price Index increased by 4.2% year-on-year in May, matching market forecasts. In April, the annual increase had been 3.8%.
Santiment analysts noted that while these signals alone do not guarantee an imminent reversal, they suggest underlying changes in less visible areas of the market.
Derivatives market pressure rises for Cardano
Despite the recent rise in value, market sentiment around Cardano remains cautious. Indicators from derivatives trading and funding rates point to growing bearish sentiment, with short positions gaining strength. This has raised doubts over the sustainability of ADA’s price recovery.
A looming “death cross” on the weekly chart is also supporting this negative outlook. This technical pattern occurs when the short-term average falls below the long-term average and is typically viewed as a signal of weakening price momentum.
Glossary: A death cross is a technical signal that appears when the short-term moving average dips below the long-term moving average. It is generally considered a sign of fading momentum in the markets.
ADA’s price now hovers near lows not seen since December 2020. Even so, two on-chain metrics suggest the market may not be entirely one-sided despite prevailing sentiment.
On-chain activity shows unusual spikes
According to Santiment, age-based on-chain indicators for Cardano have displayed some unexpected movements in recent days. The Mean Dollar Invested Age metric, which tracks the average age of capital held in wallets, has been steadily rising, indicating notable activity in long-dormant accounts.
Additionally, the Age Consumed indicator has spiked strongly. Santiment reports that this jump, the largest since April, shows previously untouched ADA tokens moving again after a long period of inactivity.
The data indicates that dormant ADA tokens have started re-entering circulation, a pattern that has historically coincided with major turning points in the market.
Santiment cautioned that these signals alone do not confirm a short-term directional change. However, previous instances when Age Consumed spiked alongside a pause or decline in Mean Dollar Invested Age have often lined up with key inflection points in the market.
In a separate note, Santiment observed that trading volumes for large cryptocurrencies have dropped to their lowest in two years. This, they suggest, could signal growing market capitulation and lay the groundwork for a relief rally in the near future.
