Cardano (ADA) has gradually declined since the beginning of December, pushing its price below $1. This prolonged decline has made investors uncertain about ADA's recovery prospects.
The hope of this Altcoin is currently placed on long-term investors (LTH) - those who have provided stability in previous difficult market conditions.
Cardano investor participation is declining
Active addresses on the Cardano network are declining sharply, reflecting the growing skepticism of investors about ADA's recovery potential. This declining participation is a worrying sign, as reduced activity indicates that many traders are withdrawing from the market, causing this Altcoin to lose liquidation.
With reduced liquidation, ADA faces greater difficulty in recovering from current levels. The lack of active participation from short-term traders highlights the hesitation of the broader market, making recovery to key price levels more difficult in the short term.
Cardano active addresses. Source: SantimentThe macroeconomic momentum of Cardano provides a glimmer of hope, supported by the MVRV Long/Short Difference, currently at 41%. This high positive value indicates that LTH have significantly more profits than short-term investors (STH), reflecting the dominance of investors willing to hold long-term rather than engage in short-term profit-taking.
The strong participation of LTH usually stabilizes the price of an asset and facilitates recovery. If these investors maintain their positions, they can offset the cautious sentiment of the broader market, preventing further declines in ADA's price and potentially supporting its recovery.
Cardano MVRV Long/Short Ratio. Source: SantimentADA Price Prediction: Reversing Losses
Cardano is currently priced at $0.89, holding just above the crucial support level of $0.87. Maintaining this support level is necessary for ADA to regain upward momentum and target the $1.00 mark, an important psychological and technical barrier.
Turning $1.00 into support is crucial to begin the recovery. If ADA achieves this milestone, it could start reversing recent losses, with a target of $1.23 to regain a stronger position in the market. This level would mark an important step in restoring investor confidence.
Cardano Price Analysis. Source: TradingViewHowever, losing the $0.87 support could have severe consequences for Cardano's price trajectory. A drop to $0.77 or lower would invalidate the bullish outlook, prolonging losses and further deepening investor skepticism. Holding above this support level is crucial to avoid a prolonged downtrend.
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