Cardano’s (ADA) decline to $ 2 is more than just a bearish breakout
In the past few weeks, Cardano (ADA) has seen a phenomenal surge, climbing to 3rd place with a new ATH from $ 3.1. However, since breaking the $ 3 mark, ADA has not shown the same strength and has steadily declined in value over the past 7 days.
Now that ADA’s price is falling along with a market-wide sell-off, the question arises, will the altcoin enter a longer period of correction?
ADA price chart | Source: Tradingview
As can be seen in the graph, for the first time since July 21, Cardano lost support for the 20-day simple moving average (SMA) and the 20-day exponential moving average (EMA) below these MA lines, which are known as act important support.
At the time of writing, a long red candle has pierced both of them. This was the first sign of a period of correction for ADA, which fell as low as $ 2 but quickly rose above $ 2.50.
Looking at the profit aspect, more than 80% of the addresses are profitable and only 15% lose money, as shown in the following graphic.
With ADA moving back to $ 2, a lower low is likely. The decline suggests that profit taking could be strong over the next few days.
In the price range of $ 1.70 to $ 2.58, more than 4.45 billion ADAs have been accumulated over 280,000 addresses. The average value of these tokens remains at $ 2, which could explain the rapid recovery from the $ 2 mark. The adjusted volume also indicates a shift shortly before the crash.
Will the ADA holder push the price down to $ 2.85?
Just before the crash, the average transfer value on Cardano was observed to hit a new ATH, which was unheard of for a full year. At around $ 2.85, the average transfer value exceeds $ 0.5 million, showing that big investors are taking action.
A few hours later, when the market started to fall, the price fell to $ 2. From this information it can be concluded that the ADA disaster was not purely accidental, as whales may also have played a role. As usual, retail investors were not ready for the decline, resulting in widespread liquidation. At the time of going to press, the situation seems to have stabilized again, with the market structure still disturbed.
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According to AMBCrypto