Despite an undeniable past performance of bullish trends and staggering price spikes, the Cardano (ADA) market has been experiencing a bearish rally that shows no sign of slowing down. This unprecedented downturn has left many investors scrambling to understand the situation and predict the next ADA price target.
Cardano: The Bearish Tide
Cardano, a third-generation blockchain platform with a unique proof-of-stake consensus mechanism, was showing an impressive trajectory in the last few weeks. However, the recent market trends are a stark contrast to its past glory. The ADA token has been slipping down the slope with no sign of an immediate recovery.
Fresh insights from IntoTheBlock, a reputable data analytics firm, reveal a concerning trend among Cardano (ADA) investors. The firm’s recent report indicates that a substantial 80% of ADA holders, comprising 3.44 million addresses, are currently “underwater,” as their holdings are worth less than the price at which they were bought.
These investors collectively hold 26.85 billion ADA, translating into a staggering $9.48 billion at the current market value. This unfortunate circumstance makes Cardano the ninth most significant cryptocurrency with over a billion-dollar market capitalization when assessed by the proportion of loss-bearing to profitable addresses.
Sebastien Guillemot, the Co-Founder and CTO of blockchain firm dcSpark, shared on Twitter that Cardano is currently operating at a 94% load. This implies that there’s just a 6% window before it reaches its full capacity.
He alerted his Twitter followers to the fact that no Cardano node uses transaction prioritization, indicating that transactions are dealt with on a first-come-first-served basis. Consequently, if Cardano’s load reaches 100%, all transactions will be lined up in a queue with others. This may result in more price drops for the ADA token in the next few days.
What’s Next For ADA Price?
The value of Cardano (ADA) has experienced a significant departure from a key pattern on the daily chart and is at risk of slipping beneath a vital support threshold.
If this transpires, it will signal an extreme bearish trend in ADA’s price. Such an event is expected to hasten the currently observed downtrend.
Over the last week, Cardano’s value made several attempts to surpass the $0.4 resistance level, but the upward momentum was unsuccessful, causing a price dip below the $0.38 support.
The price saw a further decline, falling below the $0.37 and $0.36 support levels. Eventually, it reached the $0.35 support level. A bottom is established around $0.3509, and currently, the price is trying to plunge more following BTC’s price drop below $28K.
As of writing, ADA price trades at $0.354, with a downtrend of 4.73% in the last 24 hours. If bulls don’t send the price above EMA-20 at $0.354 on the 4-hour price chart, Cardano will head toward a more downward trend. A breakout below $0.34 will slump the token near the $0.31-$0.32 support region.