Cardano Holders Facing Losses Amidst Price Decline

Cardano (ADA) investors have been grappling with significant losses as the cryptocurrency’s price dipped to $0.56 on Wednesday. This drop, nearly 30% below its year-to-date peak of $0.8104, came in the wake of a broader market correction sparked by Bitcoin’s decline to $62,000 and subsequent mass liquidations.

On-Chain Data Reveals Losses and Fear

On-chain data reveals that Cardano holders experienced substantial losses on Tuesday, with traders realizing approximately $20.09 million in losses. This trend continued on Wednesday, with losses totaling nearly $785,000 at the time of writing. Such significant losses have led to fears of a steeper correction, prompting traders to shed their ADA holdings and de-risk.

Potential for Further Selling Pressure

The Network Realized Profit/Loss metric shows pronounced dips, indicating a potential capitulation event. Furthermore, approximately 64% of Cardano wallet addresses are currently sitting on unrealized gains, according to IntoTheBlock data. Should ADA holders begin to take profits, it could exacerbate selling pressure and lead to a more pronounced decline in the token’s price.

The $0.59 to $0.64 range is critical for Cardano’s recovery. Within this range, 178,410 wallet addresses purchased 2.23 billion ADA tokens. Should the ADA price close below $0.59 on the daily timeframe, an additional 178,410 wallet addresses would experience unrealized losses.

Technical Indicators Point to Further Consolidation

Cardano’s price is likely to undergo further consolidation before any meaningful recovery. Since reaching its year-to-date peak on March 14, ADA has corrected nearly 30%, with Wednesday’s intraday low touching $0.5689. Technical indicators such as the Moving Average Convergence/Divergence (MACD) and Relative Strength Index (RSI) suggest a negative momentum, with the RSI currently at 41.25, indicating potential bearish traction. A buy signal may emerge once the RSI dips into the oversold region below 30.

Potential Scenarios for ADA Price Movement

In an optimistic scenario, Cardano’s price could witness an impulsive climb beyond resistance at $0.6291, the 50% Fibonacci retracement level. A daily candlestick close above this level would invalidate the bearish thesis and signal a rebound. Subsequently, ADA could target resistances at $0.7328 and $0.8104 on its path toward the $0.90 target, representing the 127.2% Fibonacci extension level.

Disclaimer: The information in this article should not be considered financial advice, and FXCryptoNews articles are intended only to provide educational and general information. Please consult with a financial advisor before making any investment decisions.