- Cardano price shows signs that it might dip into the $1.02 to $1.19 demand zone.
- Transaction data shows that the uptrend for ADA will face massive resistance from $1.39 to $1.35.
- A decisive close above $1.48 will create a higher high and invalidate the bearish thesis.
Cardano price is at an inflection point in its downswing journey and is likely to head lower going forward. The predominant reason for this bearishness is due to the on-chain metrics, which is showing a decline in interest and capital inflow.
Cardano price might engineer a bull trap
Cardano price is currently experiencing a slowdown as it hovers around the $1.30 support level. While there might be a quick run-up, perhaps to retest the immediate barrier at $1.40, it is unsure if ADA can sustain it.
Since September 2, Cardano price has been on a relentless downtrend and shows no sign of stopping even as it grapples with another support level, just above the daily demand zone, extending from $1.02 to $1.19.
ADA/USDT 4-hour chart
From a technical perspective, the downswing might not make sense, but IntoTheBlock’s In/Out of the Money Around Price (IOMAP) model shows that a huge cluster of underwater investors is present between $1.39 to $1.35. Here, roughly 260,000 addresses purchased nearly 5.3 billion ADA at an average price of $1.36.
Therefore, a potential spike in buying pressure that pushes Cardano price into this area is likely to be met with selling pressure from investors trying to break even.
Further supporting this bearish outlook is the decline in the transaction volume worth $100,000 or more for Cardano over the past three months from roughly 46 billion to 7.97 billion. This 82% drop in suggests that whales or high networth individuals are not interested in ADA at the current price levels.
ADA transaction volume chart
While things are looking grim for Cardano price from a technical and on-chain perspective, a decisive close above $1.48 will create a higher high, suggesting the start of a new uptrend. In this scenario, investors can expect ADA to continue its ascent to retest the $1.73 swing point.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.