Despite a Spring Rebound, Cardano Struggles to Recover
The cryptocurrency market is constantly evolving, and Cardano (ADA) has faced significant challenges in recent months. Although it experienced a period of growth in April and early May, a downtrend has since set in. Several technical and fundamental indicators suggest that a recovery in ADA’s price could be challenging in the short term.
Firstly, Santiment data shows that developer activity on the Cardano network has been declining since February. This slowdown in development activity could be concerning for long-term investors.
Moreover, the 90-day MVRV ratio has remained positive for almost two months, despite a recent decrease in profit-taking holders. This situation indicates that any attempt at an upward move would face significant selling pressure, with investors looking to realize their profits.
Short-Term Technical Outlook
The declining average age of circulating coins suggests a distribution phase within the Cardano network. This phenomenon will need to reverse to facilitate a true recovery in ADA’s price.
Technically, the market structure turned bearish at the end of May when Cardano dropped below the $0.51 level. This level now serves as a key resistance to monitor. If breached, a further decline towards $0.427 could be possible.
If ADA fails to hold above its liquidated trendline yesterday at $0.53, it will move into the demand zone between $0.48 and $0.45. This range must hold to avoid a deeper drop to $0.4.
Currently, a bullish recovery is not on the agenda as selling pressure prevails in the market. Only short-term stabilization, accompanied by increased demand, could hint at a potential reversal in trend for Cardano.
