Tech

Cardano drops 4% in 24 hours: Should you worry?

11 months ago
Bitcoin Ethereum News

Journalist

Posted:


  • ADA was down by more than 4% in the last 24 hours, but its volume increased. 
  • If ADA’s price is to turn bullish, it has to cross a resistance level near $0.64.

Cardano [ADA] witnessed a massive surge in its price over the last week as its value rallied by 30%. However, things changed in the last 24 hours as its price registered a drop.

Is this the end of ADA’s bull rally, or should investors expect a trend reversal soon?

Cardano is testing a support level

After a comfortable week-long rally, ADA witnessed a price correction. According to CoinMarketCap, Cardano was down by more than 4% over the last day.

At the time of writing, it was trading at $0.5576 with a market capitalization of over $14.6 billion, making it the eighth-largest crypto.

Though at first things might look bearish, things can soon turn in the token’s favor. Relt Capital, a popular X (formerly Twitter) handle that posts crypto analyses, pointed out that ADA was sitting right on top of a major support level of $0.51.

Once ADA tests that level, the possibility of the coin’s value surging further seems likely. As of now, though, ADA’s popularity witnessed a drop, as evidenced by its Social Dominance.

Its Weighted Sentiment also saw a plummet, suggesting that negative sentiment dominated the market.

Nonetheless, ADA remained in demand in the Futures market, as evidenced by its green Binance Funding Rate. It was also interesting to see a massive surge in the blockchain’s Development Activity.

This indicated that the developers made more efforts last week to improve the network.

Source: Santiment

ADA needs to cross these hurdles 

To restart a bull rally, ADA has quite a few hurdles to cross. Inasmuch, AMBCrypto took a look at Cardano’s liquidation heatmap to see when ADA faced problems.

Notably, the token’s liquidation surged sharply when its price touched the $0.56 mark, after which its price sank.

If the token goes above that level, ADA will witness a resistance level at the $0.64 mark, as the token failed to go above that range during the last week.

Source: Hyblock Capital

AMBCrypto then took a look at other metrics to see whether ADA’s price could gain bullish momentum in the near term. As per our analysis, ADA’s MVRV ratio registered a drop after spiking on the 10th of December. 

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Its velocity also started to decline, meaning that ADA was used in transactions less often within a set time frame. However, a positive metric was ADA’s Open Interest, which dropped.

A decline in the metric generally hints at a trend reversal, giving hope for a price uptick soon.

Source: Santiment

Source: https://ambcrypto.com/cardano-drops-4-in-24-hours-should-you-worry/