What can stop the ADA downtrend?
The rising ADA price seems like a pretty long story. Cardano’s native token peaked at $ 3.1 in September and has been declining since then.
In mid-September, the price entered a symmetrical triangle on the chart. It broke the lower support line in mid-October and continued the downtrend.
After a brief period of consolidation and the establishment of several long green candles, ADA moved south again and emptied into a descending canal. In fact, at the time of writing, it still works in that structure.
ADA / USDT | Source: TradingView
Correlation with Bitcoin increases sharply, harmful inadequacies
When ADA rose to $ 3 in September, the entire market consolidated and sank into a “sad love song”. However, the dynamic has changed since then.
ADA is now more sensitive to general trends in the broader market. In fact, it is currently one of the few coins that has been hardest hit by Bitcoin’s price fluctuations.
It should be noted, however, that ADA’s correlation with the Crypto King has increased from 0 to almost 1 in less than 2 months. So if the broad Bitcoin-led market continues to decline, ADA will most likely end up in this “garbage”.
Correlation with Bitcoin | The source: IntoTheBlock
ADA price continues to fall?
Market sentiment regarding ADA is also not overly optimistic at the time of the analysis. For example, the average HODLer balance has shrunk by more than half since mid-October.
This indicates the presence of macro selling pressure. Even in the short term, the status is no different. According to ITB order book statistics, the number of tokens sold exceeded purchases by more than 8 million in the last 12 hours.
So as long as the selling pressure remains in the market, ADA will find it difficult to deal with the bears.
Average balance | The source: IntoTheBlock
The social indicators also seem to be rather weak at the moment. The price peaks for this altcoin often coincide with high social dominance.
Social dominance increases when people from space mention or gossip about altcoins on crypto-related social media.
Social Dominance Rate | The source: mood
Only when the crowd’s euphoria returns along with the buy-side momentum can ADA begin to reverse the losses it has suffered so far. Until then, the chances of recovering and breaking the descending channel are very slim.
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