During the first quarter of 2024, Cardano’s (ADA) price climbed from $0.46 to $0.80 in less than three months. This remarkable increase suggested a potential approach to the $1 threshold. Nevertheless, the altcoin has since entered a downward spiral, exhibiting minimal signs of recapturing that previous performance.
While overall market conditions played a role in Cardano’s decline, additional factors have also contributed to its lackluster performance. This on-chain analysis explores the primary reasons behind ADA’s challenge in reaching its last recorded price point in 2022.
Resistance from Supply Wall at $1.04 for Cardano
A major factor affecting Cardano’s price trajectory is the prominent supply wall starting at $1.04. Insights from the Global In/Out of Money (GIOM) metric indicate that over 1 million addresses hold more than 2 billion ADA at this price level.
The GIOM categorizes addresses based on their profit status, distinguishing between those that are breakeven and those that have incurred losses. From a pricing perspective, a larger congregation of addresses or trading volume within a particular price range signifies stronger support or resistance.
The illustration below reveals that the volume and number of addresses around $0.35 surpass those across various price points until reaching $0.66. Consequently, there exists potential for Cardano’s price to test that threshold. Nonetheless, the supply wall at $1.04 presents a considerable barrier, complicating ADA’s efforts to advance past this segment.
Read more: How to Stake Cardano (ADA)
Additionally, the condition of the Mean Dollar Invested Age (MDIA) is exerting downward pressure on ADA. MDIA measures the average age of every dollar that has been invested in a cryptocurrency.
In bullish markets, a falling MDIA indicates that large investors are reactivating dormant assets and putting them back into circulation, often resulting in price increases.
Conversely, in the case of ADA, the 90-day MDIA has been on the rise, signifying that long-term holders are not selling their assets. This pattern suggests that achieving price growth may be challenging due to stagnant investor activity.
ADA Price Forecast: Risk of Falling to $0.32
Currently, Cardano’s daily price stands at $0.37, coinciding with the formation of a head-and-shoulders pattern. This pattern typically signals a transition from bullish to bearish and can expedite a downward trend.
Furthermore, ADA is encountering substantial resistance at its existing price, making it difficult for the token to trade at higher levels. If this scenario persists, Cardano’s price may slide toward $0.32 in the near term.
Read more: 6 Best Cardano (ADA) Wallets You Should Consider in October 2024
Nonetheless, the long-term perspective for the token could turn bullish if wider market conditions enhance. Specifically, should Bitcoin (BTC) rise above $70,000, ADA’s price might also start to increase. If BTC achieves a new all-time high, the altcoin could potentially reach $0.61 and move closer to the $1 mark.
Disclaimer
According to Trust Project guidelines, this price analysis article is intended for informational purposes only and should not be construed as financial or investment advice. BeInCrypto is dedicated to providing accurate and impartial reporting; however, market conditions can change unexpectedly. Always conduct your research and seek professional advice before making any financial commitments. Please be aware that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
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