• Cardano price drop 30% twice in four months, with the $0.2535 to $0.2446 order block breaking the fall both times.
  • With this demand zone holding as a support level, ADA may be due for an upward correction toward $0.3000.
  • On-chain metrics show steady rise in social dominance alongside a positive index for its MVRV ratio.
  • Invalidation of this bullish outlook will occur if the altcoin records a decisive daily candlestick close below $0.2446.

Cardano (ADA) price has been trading with a bearish bias over the last two months, shedding all the ground covered in the July 13 rally. In part, the US Securities and Exchange Commission (SEC) branding ADA a security has cast a dark cloud over the altcoin, placing it at a disadvantage alongside peers like Polygon (MATIC) and Solana (SOL).

Also Read: Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Possible moves as BTC goes back to consolidation mode.

Cardano price poised for retaliation

Cardano (ADA) price appears to have found support, offered by the demand zone between the $0.2446 and $0.2535 order block, after a 30% drop from the July 13 high of $0.3673. Notably, this order block has held as support for ADA multiple times and could be the inflection point for the much-awaited pullback.

Cognizant that demand zones are areas where buyers abound, increased buying pressure above the current level of $0.2546 could set the tone for Cardano price to reach for the psychological $0.3000, a level last seen on August 9. A move to reclaim the $0.3519 level would be likely in a highly bullish case, provided alignment from Bitcoin (BTC) price is present.

Notably, the histogram bars of the Awesome Oscillator are soaking in green, suggesting bullish presence that could bode well for Cardano price.

This is corroborated by the flattening Relative Strength Index (RSI) after a steep slope, evidence of corrective measures in play to avoid further downside.

ADA/USDT 1-day chart

Cardano on-chain metrics defy ADA price

Meanwhile, on-chain metrics are promising for ADA, with its social dominance recording a steady rise. This metric indicates the share of the asset’s mentions on crypto-related social media relative to a pool of more than 50 other most talked about projects online.

ADA Santiment

Similarly, the MVRV ratio, showing Cardano’s market capitalization as a fraction of its realized capitalization ratio, is also positive, recording a steady rise since August 31. The steady climb means the market value of ADA supply is increasing relative to the realized value.

More broadly, the increasing values point to a larger degree of unrealized profit, thereby increasing the probability that investors will distribute the tokens to lock in gains. This would add to the liquid supply that has to be absorbed by demand pressure.

On the contrary, a declining trend in the MVRV ratio would signal a smaller degree of unrealized profit, interpreted as undervaluation, poor demand dynamics, or both.

ADA MVRV

Nevertheless, with Bitcoin price still showing weakness and the broader market gloom, the uptrend for Cardano price would require a strong resolve among the bulls. Failure could see ADA slip through the demand zone, rendering it a bearish breaker before recording a new range low, potentially tagging the psychological $0.2200 level. 

Cryptocurrency metrics FAQs

What is circulating supply?

The developer or creator of each cryptocurrency decides on the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted by mining, staking or other mechanisms. This is defined by the algorithm of the underlying blockchain technology. Since its inception, a total of 19,445,656 BTCs have been mined, which is the circulating supply of Bitcoin. On the other hand, circulating supply can also be decreased via actions such as burning tokens, or mistakenly sending assets to addresses of other incompatible blockchains.

What is market capitalization?

Market capitalization is the result of multiplying the circulating supply of a certain asset by the asset’s current market value. For Bitcoin, the market capitalization at the beginning of August 2023 is above $570 billion, which is the result of the more than 19 million BTC in circulation multiplied by the Bitcoin price around $29,600.

What is trading volume?

Trading volume refers to the total number of tokens for a specific asset that has been transacted or exchanged between buyers and sellers within set trading hours, for example, 24 hours. It is used to gauge market sentiment, this metric combines all volumes on centralized exchanges and decentralized exchanges. Increasing trading volume often denotes the demand for a certain asset as more people are buying and selling the cryptocurrency.

What is funding rate?

Funding rates are a concept designed to encourage traders to take positions and ensure perpetual contract prices match spot markets. It defines a mechanism by exchanges to ensure that future prices and index prices periodic payments regularly converge. When the funding rate is positive, the price of the perpetual contract is higher than the mark price. This means traders who are bullish and have opened long positions pay traders who are in short positions. On the other hand, a negative funding rate means perpetual prices are below the mark price, and hence traders with short positions pay traders who have opened long positions.


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.

Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Could DOGE see a rally amid quietness in the meme coin sector?

Could DOGE see a rally amid quietness in the meme coin sector?

Dogecoin's price (DOGE) gained about 2% on Thursday, following a quiet day across the meme coin sector. Amid the calmer markets, DOGE's derivatives and on-chain data reveal key insight that may help predict its future price movement.

More Dogecoin News

Controversy surrounding DJT meme coin continues, Martin Shkreli claims Stone “does not know Barron Trump”

Controversy surrounding DJT meme coin continues, Martin Shkreli claims Stone “does not know Barron Trump”

More drama unfolded on Thursday after Martin Shkreli spoke against Roger Stone, who claimed that neither Barron Trump nor ex-president Donald Trump are involved in the DJT token.

More Cryptocurrencies News

Ethereum ETF issuers launch marketing campaign with slight dig at TradFi

Ethereum ETF issuers launch marketing campaign with slight dig at TradFi

Ethereum's (ETH) price is down about 1% on Thursday following a Bitwise Ethereum ad that slightly poked fun at traditional finance. Meanwhile, Ethereum restaking has continued to grow amid potential systemic risks.

More Ethereum News

Web3 security firm identifies activity similar to Kraken breach on OKX, BingX, Gate.io and Binance

Web3 security firm identifies activity similar to Kraken breach on OKX, BingX, Gate.io and Binance

Security-focused ranking platform CertiK identified itself as the “white-hat” hacker behind the $3 million Kraken hack. The exchange is treating the case as a criminal exploit.

More Cryptocurrencies News

Bitcoin: Has BTC found a local price bottom?

Bitcoin: Has BTC found a local price bottom?

Bitcoin (BTC) price looks set for a mild fall this week, weighed by slight outflows in the US spot ETFs and the US Fed keeping a hawkish interest-rate outlook despite easing inflation. Technical indicators suggest that BTC could face a further 5% correction in the short term before resuming the uptrend.

Read full analysis

BTC

ETH

XRP