For the past week, ADA price was virtually unchanged, down 0.62%. The fact is, this altcoin rarely rises alongside other large-cap coins. Its historically not so high correlation with Bitcoin and ETH is evidence that ADA is somewhat decoupled from broader market trends.
After all the hype surrounding Alonzo, will ADA’s price drop below $ 1?
The state of on-chain data for ADA has been grim so far. As the recent drop in the number of transactions on the Cardano blockchain shows. According to data from CardanoScan, this metric is almost half as low as of September 29, 2021 (from 120,000 to 66,000).
Number of transactions in 15 days | Source: CardanoScan.io
In addition, interest is waning, as the decline in the number of active addresses and the average transfer value shows. The lower number of interactive addresses in the network underscores the dormant state of ADA market participants.
Number of active addresses | The source: Messari
The stagnation of the average transfer value also determines the decrease in the amount of ADA exchanged between the participants.
Average transfer value | The source: Messari
Worse still, growth, once Cardano’s strongest indicator, is also struggling. In fact, according to the Santiment chart, the last time such a low was recorded was last December.
Development activities | The source: mood
On the price chart, ADA has been trading in a symmetrical triangle since the last days of September, this pattern usually indicates a phase of consolidation before the price breaks up or down.
A breakout of the lower trendline triggers a new downtrend, while a breakout of the upper trendline signals the beginning of a new uptrend.
Currently, ADA is oscillating near the lower trendline of the triangle. So if the bears continue to maintain their strength, that support will be lost and bearish sentiment will rise.
ADA / USDT | Source: TradingView
Also, ADA has been trading below the moving averages for more than 3 days. This is not a good sign. If the bulls don’t intervene, a drop to $ 1.95 and further to $ 1.60 is possible. It should be noted, however, that the $ 1 range has acted as strong support for ADA since March this year.
Therefore, the chances of ADA falling below this level are rather slim at the time of writing.
Conversely, if the status of the above indicators begins to improve, the bulls attempt to regain control and create appropriate buying pressure, ADA can be expected to break the upper resistance line of the triangle.
In such a situation, the price can reach $ 2.47 before rising to $ 2.80.
You can see the ADA prices here.
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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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