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Cardano (ADA) has recently seen a significant increase in transaction volume. While this initially seems positive for ADA, the corresponding price trend could show discordance.
Santiment’s ADA Report
On January 14th, Cardano’s transaction volume fell from around 600 million dollars to approximately 300 million dollars, according to data analyzed from Santiment. The chart showed a consistently low volume until around January 23rd, when a spike took the volume over 500. At the time of writing, the volume was above 560 million dollars. Additionally, data from 21milyon.com indicated an approximate 30% increase in volume over the last 24 hours.
Despite the volume trend suggesting increased trading activities, the price trend could indicate that the volume has a negative impact on ADA. Over the past four days, Cardano has shown a consistent downward trend in the daily time frame chart. The analysis indicated that ADA had fallen by about 10% during this period. At the time of writing, it reflected a 2.5% decrease, trading at 0.46 dollars.
ADA Shows Bearish Signal
The Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI) further indicated weakness in the price trend. The RSI was below 40 and still declining, which could signal a strong bearish trend approaching the oversold territory. Additionally, the MACD being below zero could confirm the bearish signals from the RSI. This dominant price trend could indicate that ADA’s transaction volume is dominated by selling activities and that surges could potentially lead to further price declines.
An analysis of Cardano’s 7-day Market Value to Realized Value (MVRV) ratio on Santiment could indicate that holders are facing double-digit losses. At the time of writing, the MVRV was around -16.6%, which could mean that owners have experienced a loss of over 16%. A parallel analysis of the 30-day MVRV showed nearly the same scenario. The 30-day MVRV was around -17%, reflecting the loss of holders during this period.
