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In the past few weeks, the drop in Cardano (ADA) price has caused losses for many investors. On-chain data showed that the number of daily transactions resulting in losses exceeded those yielding profits. Last month, the altcoin lost nearly 10% of its value. What will happen next?
Daily Transactions in ADA
The cryptocurrency fell to $0.42 before recovering. Due to the steady decline in the cryptocurrency’s value over the past few weeks, most holders recorded losses in their transactions. The evaluation of ADA’s daily transaction volume’s profit/loss ratio was 0.94.
This could mean that only 0.94 transactions out of every loss-making ADA transaction were profitable. When this metric returns a value below 1, it may indicate a tendency for more selling pressure than buying pressure during the period under review. As the cryptocurrency price fell, most holders continued to struggle with unrealized losses. At the time of writing, 2.62 million addresses, representing 59% of all ADA holders, were out of investment.
Technical Indicators in ADA
Data from ADA’s Elder-Ray Index suggested that ADA investments might continue to lose value in the short term. The mentioned indicator measures the relationship between the strength of buyers and sellers in the market. A negative value could mean that bear strength dominates the market. As of the time of writing, ADA’s Elder-Ray Index value was -0.038.
Additionally, the token’s relative strength index (RSI) was in a downtrend at 41.94. At this value, ADA’s RSI signaled that selling pressure exceeded buying activity. However, if investors pay attention to ADA’s market value/realized value (MVRV) ratio, which signals a buying opportunity at the current position, and “buy the dip,” the token’s price could rise to $0.479. As a result, 59% of ADA holders, approximately 2.62 million addresses, faced losses in their investments. Indicators like the Elder-Ray Index and RSI suggest that ADA’s value might continue to decline in the short term, with bear strength dominating the market.
