Cardano (ADA) Price Faces Challenges as Volume of Large Transactions Drops
Cardano (ADA) has experienced a decline in its price recently, trading at $0.37 and seeing an 18% decrease over the past month. This drop in price has caused some of the biggest holders of ADA to reduce their trading activity, as shown by on-chain data.
The volume of large transactions in ADA has significantly decreased in the last month. For example, the daily count of ADA transactions worth between $1 million and $10 million has dropped by 33%, while transactions worth $10 million or more have dropped by 24%.
A decrease in large transaction volume indicates a decline in big trades for the asset. This can be attributed to various factors, with a significant one being a shift in market sentiment from positive to negative. This negative sentiment is reflected in ADA’s weighted sentiment, which is currently at -0.58.
When an asset’s weighted sentiment is negative, it often leads to continued declines in its value. Investor hesitation to trade the asset results in decreased demand and subsequent price drops. This suggests that ADA holders may suffer more losses in the future.
Technical indicators further support the decline in ADA’s demand. The Relative Strength Index (RSI) has fallen below the 50-neutral line, indicating that selling pressure outweighs buying activity for ADA. Additionally, the Directional Movement Index (DMI) shows that bears have taken control of the market since June 12.
The current setup of the DMI, with the positive index below the negative index, confirms the significant selling pressure. If sell-offs continue to increase, ADA’s value may drop to $0.35. However, a shift in sentiment from negative to positive could lead to a spike in buying pressure and a climb in ADA’s value to $0.41.
Overall, the recent decline in large transaction volume and negative sentiment surrounding ADA’s price suggest challenges for the cryptocurrency in the near term. Holders may need to brace for potential further losses.