Cardano’s Market Sentiment – A Closer Look
Cardano [ADA] Facing Mixed Signals
Cardano [ADA] experienced a local high at $0.81 about a month ago; however, it has since been retracing its gains. Currently trading at $0.585, the price has seen a 26.5% drop. Recent reports suggest that whales have been offloading their ADA tokens, a bearish signal, during this dip.(1)
Analyzing On-Chain Metrics
Cardano’s consolidation below the $0.6 level indicates a potential accumulation phase for the bulls.(1) As we look deeper into the on-chain metrics, we find conflicting signals in the market sentiment that require further examination.
Conflicting Signals in On-Chain Metrics
The number of ADA addresses holding between 1k-1 million ADA has been decreasing, and the mean coin age (90-day) has fallen swiftly in the latter half of March. However, there has been a recent recovery in both metrics, suggesting a renewed phase of accumulation.(1) On the other hand, the MVRV ratio in the negative territory indicates that investors are facing unrealized losses and that the asset might be undervalued.(1) Along with this, the Network Value to Transactions (NVT) ratio has been on the rise, approaching levels seen in May 2023.(1) These conflicting metrics require further analysis to understand market sentiment accurately.
Assessing Market Sentiment
Examining social metrics and the price action chart, we gain insights into the market sentiment surrounding Cardano [ADA]. The 7-day SMA of the social dominance experienced a rapid decrease after April 24 but has recently shown slight increments.(1) The social volume, on the other hand, has been gradually declining since mid-March.(1) The weighted sentiment has been predominantly negative over the past month, suggesting bearish sentiment amongst social media participants.(1) These negative indicators align with the recent price decline.(1)
Technical Analysis and Future Outlook
Technical analysis of the 1-day chart indicates a slightly bullish market structure, with the $0.568 swing low from late February remaining unbroken.(1) The weekly chart displays strong bullishness, with ADA surpassing the April 2023 lower high in December and continuing its upward movement.(1) However, the RSI suggests a firm bearish sentiment, with a value of 41.(1) According to Fibonacci retracement levels, the next potential support level stands at $0.525, which might attract prices.(1) Interestingly, the upward trend of the OBV since early February suggests possible reversal and a potential avoidance of a downtrend, even if prices drop to $0.525.(1)
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Readers should conduct their own research.
Source:
(1) ADA Santiment – Chart analysis by Santiment. Retrieved from https://news.google.com/rss/articles/CBMiTGh0dHBzOi8vYW1iY3J5cHRvLmNvbS9pcy1jYXJkYW5vLXVuZGVydmFsdWVkLXdoYXQtZGlmZmVyZW50LW1ldHJpY3Mtc3VnZ2VzdC_SAVBodHRwczovL2FtYmNyeXB0by5jb20vaXMtY2FyZGFuby11bmRlcnZhbHVlZC13aGF0LWRpZmZlcmVudC1tZXRyaWNzLXN1Z2dlc3QvYW1wLw?oc=5.
