Cardano (ADA) Trading Activity Goes Quiet: Will This Drag Down The Price?
May 07 2024 - 10:00AM
NEWSBTC
Cardano (ADA), the third-generation blockchain platform, has been
mirroring a mountain climber clinging to a precarious ledge. After
a brief ascent earlier this month, the price has dipped back down,
leaving investors questioning the strength of the current uptick.
While a recent surge in active addresses hints at renewed interest,
technical indicators and declining trading volume paint a picture
of an uncertain future. Related Reading: 900 Million Telegram Users
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Cardano’s current price action presents a complex picture. The
recent uptick offers a glimmer of hope, but the technical
indicators and declining volume suggest a possible continuation of
the downtrend. Though its impact is still unknown, the increase in
active addresses is a promising indication of possible rekindled
interest. It will take time to see if ADA can emerge from the
gloomy clouds and start its ascent with greater assurance.
Cardano’s Uphill Battle: Price Struggles For Traction For holders
of ADA, May started off with a ray of hope. After a rally of three
days, the price increased to $0.46 from $0.45. Nevertheless, a
series of losses soon erased these gains, returning the price to
the $0.45 region, which is where it was previously. This pattern of
stops and starts emphasizes how ADA suffers from a lack of
consistent propulsion. Total crypto market cap currently at $2.294
trillion. Chart: TradingView As of today, a small uptick has
brought ADA back to the $0.45 zone, offering a temporary respite.
But lurking beneath the surface is the persistent bear trend, a
fact confirmed by the Relative Strength Index (RSI) hovering just
above 40. This metric suggests weak buying pressure and the
potential for further price slides. Source: CoinMarketCap Making
matters worse, a technical indicator known as a “death cross” looms
on the horizon. This ominous pattern occurs when the short-term
moving average crosses above the long-term average, often signaling
a bearish price trend. With ADA currently trading below both these
averages, the threat of a death cross adds another layer of
uncertainty to the price trajectory. Cardano’s Quiet Streets:
Trading Volume Dampens Enthusiasm Trading activity on the Cardano
network hasn’t exactly been bustling. The volume, which surged to
over $400 million at the beginning of May, has since dwindled to
around $275 million. This significant drop suggests a decline in
investor interest, which can act as a drag on price increases.
Source: Santiment Typically, a healthy increase in volume
accompanies sustained price hikes, indicating strong buying and
selling activity. In Cardano’s case, the muted volume paints a
concerning picture of a market lacking conviction. Related Reading:
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Addresses Show Tentative Rise A lone bright spot emerges in the
form of Cardano’s active addresses. This metric tracks the number
of unique addresses participating in transactions on the network.
There’s been a recent uptick in seven-day active addresses, with
the number rising from around 155,000 to over 160,000. While this
increase is encouraging, some analysts believe it might not be
substantial enough to significantly impact trading activity and
trigger a sustained price reversal. Featured image from
InspiredPencil, chart from TradingView
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