Decreased user activity and strong resistance levels are driving down Cardano prices, causing concern among crypto investors. Explore the analysis and outlook for this blockchain.
Several key indicators show a significant slowdown in activity on the Cardano network in recent weeks:
This waning user interest and liquidity reduction on the blockchain align with the recent drop in ADA’s price.
The lack of enthusiasm in Cardano’s derivatives market is another factor weighing on ADA’s price:
Historically, assets with declining Open Interest (OI) struggle to maintain an upward momentum due to insufficient capital and enthusiasm to drive prices higher. ADA may face further losses without renewed interest from institutional or retail traders.
Technically, Cardano remains entrenched in a downtrend initiated when the price was rejected from a major resistance zone in early March:
The next support level to watch is around the psychological threshold of $0.60. If it breaks below this level, ADA may then target the range between $0.5794 (February 28 low) and $0.5197 (November 13, 2024 low).
ADA’s token has broken its uptrend line. An uptrend line forces investors to go long below. These trendlines are used by smart money to force selling, in this case, to accumulate at lower prices. ADA must bounce between $0.57 and its current price of $0.63, or risk invalidating a rebound in the coming days.
Despite Cardano’s project ambitions, its price currently seems trapped in a challenging downtrend. The decline in activity on the network, negative signals in the derivatives market, and the technical fragility of ADA’s price structure are worrisome factors to monitor in the coming weeks. Investors should exercise caution in the face of this volatile situation.
Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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