Cardano [ADA] holders going long this week should read this
Cardano [ADA] is about to conclude the month on an overall bearish performance despite a promising start. Investors were optimistic that September would at least provide a bullish outcome, especially in light of major developments.
However, ADA did at least manage an 18% rally in the first 11 days of the month. It retraced since then and retested August lows. ADA traded at $0.43 at press time, which was close to its monthly low of $0.42. More importantly, this was also the same level that previously offered support.
ADA might bounce from the same short-term support if history repeats. Its press time performance reflected the low investors’ confidence. This also explained why it failed to achieve a noteworthy upside despite its latest major network upgrade.
The lack of investors’ confidence was reflected in ADA’s velocity which was at its lowest four-week levels at press time. This confirmed that ADA coins were less frequently traded in the last few days.
ADA’s 24-hour active addresses metric also demonstrated a similar outcome. The number of active addresses dropped drastically in the last few days. These observations were not unexpected considering ADA’s performance so far in 2022.
Does ADA have something good in store?
It is not all doom and gloom for the altcoin, because there was some bullish activity near the current support. ADA’s Market Value to Realized Value (MVRV) ratio bounced sharply in the last two days. This pointed towards the fact that there were some major purchases which stood in profit after a slight upside.
The MVRV ratio’s uptick also confirmed that there was still some demand near the current support. It might also provide some insights into what to expect moving forward. A likely outcome was that ADA could bounce from the current level in September in another bullish attempt.
Potential ADA catalysts
Given ADA’s current situation, the altcoin would need a catalyst to facilitate a return of investors’ confidence. And, IOHK’s latest update might be enough to facilitate the same.
The update confirmed that the Vasil upgrade was successful while highlighting the advantages that will accrue from the development.
We’re pleased to announce that after a successful #Vasil upgrade on the 22nd of Sept, the new capabilities (including node & CLI support for reference inputs, inline datums, reference scripts), along with a new #Plutus cost model, are now available on the #Cardano mainnet! ? pic.twitter.com/USja3TcJNi
— Input Output (@InputOutputHK) September 27, 2022
The update also highlighted Cardano’s readiness to host dapps, which introduced more efficiency and cost-effectiveness.
Meanwhile, Japanese crypto exchange Bitbank recently announced that it will soon list ADA. A listing on a major exchange, especially in the Japanese jurisdiction, might be another upcoming catalyst for ADA. This is because it will open up an avenue for more liquidity.
ADA’s current position might be underpinned by low investors’ interest but a change may be expected soon.
The coin has historically gone through such phases followed by an influx of buying pressure. Its current support level, coupled with the aforementioned catalysts may provide the perfect conditions for another wave of bullish pressure.