The United States Securities and Exchange Commission has included Cardano (ADA) in a court filing as one of the tokens identified as securities. This has resulted in a 10% price retracement and continues to impact the markets negatively. With the on-chain data revealing little chance of an ADA price rebound, investors are wondering if Cardano can recover from this setback.
Cardano Holders May Refrain from Selling
Recent data from Santiment’s Market Value to Realized Value reveals that investors who bought Cardano in the past month are sitting on unrealized losses. The MVRV ratio puts the investors’ net financial position into consideration by comparing their purchase prices to current market prices. With prices currently at $0.33, investors who bought ADA in the past month are holding nearly 13% unrealized losses. Therefore, strategic Cardano investors may grow unwilling to sell and try to keep their losses below 15%. If they stop selling, they could inadvertently trigger a rebound.
Long-Term Investors Now Look to HODL
On-chain data shows that long-term investors are cutting down on sell actions, as indicated by the gradual drop in ADA Age Consumed. Age Consumed tracks the number of coins recently transferred multiplied by the number of days since they were last moved, evaluating trading sentiment among long-term investors. After moving tokens en masse on Monday, once the price dropped below $0.35, long-term investors gradually slowed their network activity. When Age Consumed considerably drops, it indicates that long-term holders are increasingly unwilling to sell, reducing the sell pressure that could help ADA defend the $0.30 mark in the coming days.
ADA Price Prediction: Potential Rebound to $0.40
Even with the possibility of strategic investors not selling and reducing long-term holder sell pressure, IntoTheBlock’s In/Out of the Money Around Price data suggests that ADA will face its first significant resistance around the $0.34 mark. 96,000 investors who bought 760 million ADA at an average price of $0.34 could form a sell-wall. But if bullish momentum prevails, the bulls could push ADA above $0.38. If ADA unexpectedly drops below the critical $0.30 support zone, however, the bears could invalidate the bullish Cardano price prediction. That said, the 122,000 investors who purchased 1 billion ADA at a minimum price of $0.30 are expected to hold the zone.
Although unlikely, ADA could retrace further toward $0.27 if that support level is breached.
Disclaimer
This price analysis article is for informational purposes only and should not be considered financial or investment advice. Bitrabo is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.