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Blockchain Reporter

04/27/2024

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Cardano Could Be Preparing For A Bullish Turnaround Amid Promising On-chain Metrics: What's Next For ADA Price?

Despite Cardano’s mixed price performance this season, ADA enthusiasts remain hopeful about the token’s growth, believing its value is poised to soar in the coming weeks. The ADA ecosystem is on the verge of...

Cardano Could Be Preparing For A Bullish Turnaround Amid Promising On-chain Metrics: What's Next For ADA Price?

Despite Cardano’s mixed price performance this season, ADA enthusiasts remain hopeful about the token’s growth, believing its value is poised to soar in the coming weeks. The ADA ecosystem is on the verge of integrating a Chang Hard Fork, an update that could significantly influence Cardano’s current price trajectory. Additionally, bullish on-chain metrics might strengthen support levels, creating chances for a solid jump in ADA price.

Throughout April 2024, Cardano (ADA) investors have predominantly sold off their holdings at a loss, with only a handful of days seeing profits. Despite this, on-chain metrics remain optimistic for Cardano’s price, indicating potential buy signals.

The Global In/Out of the Money (GIOM) indicator, provided by the crypto intelligence tracker IntoTheBlock, categorizes addresses based on their current financial status—profiting (in the money), breaking even (at the money), or incurring losses (out of the money) based on the present price.

For Cardano, the GIOM reveals that only 37% of ADA wallet addresses are currently in a profitable position. Nearly 63% of the addresses are either underwater or facing unrealized losses. Generally, when a significant portion of wallets (a higher percentage of addresses) is facing losses, it is less likely that these holders will sell their ADA holdings.

With the current price of ADA at $0.4558, selling would mean a loss for 59% of the wallet addresses. This scenario decreases the chances of a sell-off, potentially making it an opportune moment for sidelined investors to buy the dip in anticipation of a recovery in the altcoin’s value.

Additionally, the large transaction metric from IntoTheBlock, which monitors transactions exceeding $100,000 on the Cardano blockchain, serves as an indicator of whale activity. This metric, when analyzed alongside the asset’s price, helps to track movements by large investors.

On April 26, the number of large transactions volume declined to $24.1 billion, marking a 10% decrease from the previous day. Concurrently, the price of ADA fell nearly 3% to $0.45. The decline in large transactions amid a price decline suggests that major wallet holders may be capitalizing on the lower prices to sell more ADA, creating a bearish sentiment on the chart.

Throughout April 2024, Cardano holders have primarily sold ADA tokens at a loss, apart from a few days when traders achieved net profits. The Network Realized Profit/Loss metric from Santiment assesses the net profit or loss (in USD value) of all coins transacted during a specific time frame. When paired with price data, this metric offers insights into overall market sentiment, capital inflows or outflows, and potential capitulation events.

This trend aligns with a capitulation phase in the altcoin market, suggesting that it might be a good time to consider buying Cardano.

What’s Next For ADA Price?

Cardano experienced a decline from the 20-day EMA (priced at $0.46) on April 27, falling to a key support level at $0.44. Though bears continue to intensify their selling pressure, buyers are strongly defending a drop below immediate Fib channels. As of writing, ADA price trades at $0.456, declining over 1.6% in the last 24 hours.  

Should the price bounce back from $0.44 and surpass the 20-day EMA, this could imply that the correction has ended. Under this scenario, the ADA/USDT pair might climb towards the 50-day SMA (priced at $0.59) and potentially reach $0.68.

Conversely, if the price drops further and breaks below $0.44, it would suggest that the bears are still dominant. The pair could then decrease to the critical support at $0.40, and a fall below this point might signal a continuation of the downtrend.

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