Cardano’s (ADA) price recently experienced a significant drop, failing for the second time in a month to close above the $0.40 level. The altcoin’s price fell by 11% within 48 hours, bringing it down to around $0.35.
Despite this sharp decline, ADA still has a chance to recover. The possibility of the cryptocurrency regaining lost ground is presenting an opportunity for traders and long-term investors alike.
Cardano Has Profits to Look Forward To
The recent downturn in Cardano’s price has led to a loss in profitability for approximately 3.31 billion ADA tokens. According to the Global In/Out of the Money (GIOM) metric, this supply, worth over $1.1 billion, was acquired when Cardano was trading between $0.35 and $0.37. This supply currently sits underwater, but if ADA manages to recover above the $0.37 mark, it could return to profitability.
As Cardano approaches this crucial price level, investor sentiment will be key in determining whether the cryptocurrency can bounce back. A recovery above $0.37 would improve profitability for those holding ADA as well as reinforce confidence among investors, potentially leading to further price gains.
Read more: How To Buy Cardano (ADA) and Everything You Need To Know
Despite the recent 11% decline, Cardano’s realized profit/loss indicator suggests that investors are remaining composed. The lack of significant spikes in the indicator signals a low level of panic selling.
This stability is crucial, as it indicates that ADA holders are opting to “HODL” their positions rather than selling at a loss. Such behavior from investors is encouraging, as it suggests that confidence in Cardano’s long-term potential remains intact.
ADA Price Prediction: Finding Momentum
At the time of writing, Cardano is trading at $0.35, hovering just above the key support level of $0.34. Should ADA successfully defend this support, it stands a strong chance of bouncing back toward the $0.37 resistance level. A recovery here could open the door for further upward momentum, allowing Cardano to reverse its recent losses.
If ADA manages to flip $0.37 into support, the 3.31 billion ADA tokens bought between $0.35 and $0.37 will turn profitable. This scenario could drive renewed bullishness among investors, reducing selling pressure and supporting a sustained rally in price.
Read more: Cardano (ADA) Price Prediction 2024/2025/2030
However, if Cardano fails to break through the $0.37 resistance, it may struggle to gain upward momentum, keeping the price consolidated below this critical barrier. A drop below the $0.34 support would invalidate the bullish outlook, potentially leading to more significant losses and further discouraging short-term traders.
Disclaimer
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Source: https://beincrypto.com/cardano-eyes-profit-despite-price-drop/