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Cardano (ADA) price abandoned its one-month-ling northbound trajectory around mid-April after the resurgence by the bears into the ADA market. The leadership change saw the altcoin drop around 15% to settle under the $0.400 area. Bullish effort tried to restore the price above the critical area- and successfully so for a while- before a pullback.
At the time of writing, Cardano price is $0.386 after losing almost 1% in the last 24 hours. Similarly, the altcoin was down around 20% in 24-hour trading volume to $223.33 million. Considering the asset price was dropping in tandem with its trading volume, buying pressure for the altcoin was dropping. This hinted at the possibility of a continued downtrend.
Active Developments In The Cardano Network Could Help The Bulls Send The Price Of ADA Up
Network activity on the Cardano blockchain appears to be growing, an outcome that is attributed to the numerous efforts by the network’s developers. Specifically, the Djed Alliance team disclosed the launch of a new stablecoin on the Cardano Milkomeda-C1 sidechain. Notably, the stablecoin would be compatible with Ethereum.
📢Breaking News!
The Djed stablecoin protocol is coming to Milkomeda-C1, the EVM-compatible sidechain of Cardano.
This marks the third deployment of Djed, and the first one in Solidity! #Djed #Milkomeda #Cardano https://t.co/U7KdCFd90N
— Milkomeda (there is no token) (@Milkomeda_com) April 26, 2023
The development is a possible trigger that could fuel a recovery for Cardano price ADA. Moreover, Cardano developers from Input Output Global provided an update on the progress around the development of Cardano’s Laуer 2 scalability solution, christened Hydra. The team is also setting the groundwork to release version 0.10.0 and is currently streamlining the test suites. The two developments could serve as bullish triggers for the Cardano crypto in the long run.
Hail Hydra. #Cardano will have a great second-layer solution. https://t.co/yTF8Lx6BAX
— Cardanians | stake with CRDN3 (@Cardanians_io) May 1, 2023
Nevertheless, Santiment data shows that since April 19, large Cardano investors have shrunk their balance sheets by around 2 billion ADA tokens.
This situation reflects a change in sentiment among holders.
Notably, when large-owner reserves decrease, it is often a bearish sign for an altcoin. Nevertheless, other metrics on the ADA network continue to grow, including the number of daily active addresses and the volume of transactions.
Based on the data represented in the chart above, the last spike in transaction volume on the Cardano network was observed on April 27, five days ago. Since then, the trading volume of ADA has been at a standstill. Similarly, the number of daily active addresses is almost at the same level as last month, with ADA owners waiting for a recovery in Cardano price.
Cardano Price Could Drop 5%
Cardano price, currently at $0.386, is trading with a bearish bias after a 7% drop since April 28. Based on the general outlook, the downtrend could continue until the altcoin finds support around the $0.370 support level. This thesis assumes that one cohort of traders is waiting for a significant catalyst to kickstart a northbound move. The other cohort is waiting to buy ADA at low prices and is therefore looking for the ideal entry positions.
Cardano price is currently sitting on the support provided by the 50-day Simple Moving Average (SMA) at $0.385. The altcoin also enjoyed more downward support due to the 100- and 200-day SMAs at $0.377 and $0.351, respectively.
The Relative Strength Index (RSI) was still in the negative zone, a sign of bearish leadership over the bulls. In the same way, the Moving Average Convergence Divergence (MACD) has just moved into negative territory, further bolstering the case for the bears. Notice the histograms flashing red in the negative zone to solidify the case for the bears.
On the flip side, if sidelined investors buy Cardano around the supplier congestion zones represented by the three SMAs, ADA could pull back to embrace a northbound move. In such a case, the altcoin could tag the $0.420 resistance level or ascend to tag the $0.463 resistance level in a highly bullish case. Such a move would denote a 20% climb from the current levels.
Notice that the RSI had just repelled the northbound move, a sign of a bullish effort to recover the ADA market. An increase in buying pressure could make the bullish thesis a reality.
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