Cardano’s [ADA] price down by 9% – What’s this week’s prediction?

Earlier this week, AMBCrypto reported that Cardano [ADA] had seen an increase in daily active wallets.

While this was positive for the network, the token noted a 9.88% loss over this time frame, according to CoinMarketCap.

Interest in Cardano’s meme coins could also spur demand for the ADA token. However, the current market retracement has slowed down the meme coin sector as well.

Regardless, investors have good reason to maintain faith in ADA. Its price action and on-chain metrics showed a long-term bullish outlook.

The losses it could see in the next couple of weeks would likely present investors with a buying opportunity.

Advancements in the ADA ecosystem

Besides price changes, Cardano’s ecosystem experienced significant advancements, especially once Mithril was upgraded.

The network has continuously run without any problems since its mainnet debut in June, thanks to the increasing participation of committed Stake Pool Operators.

Mithril’s constructive expansion of the Cardano ecosystem has the potential to improve the network’s usability and general appeal.

More than just a digital currency

ADA is more than just a digital currency; it is a testimonial to the secure exchange of value, removing the need for middlemen.

Every ADA owner becomes a stakeholder, contributing to the Cardano ecosystem in a multitude of ways.

The initial ADA supply was limited to 45 billion units, with a one-of-a-kind distribution technique.

The Cardano Foundation, EMURGO, and IOHK are critical components of the Cardano ecosystem, and they were allotted funds during the pre-launch sales event.

The deliberate allocation of genesis blocks laid the groundwork for Cardano’s journey.

The innovative Ouroboros Proof-of-Stake (PoS) consensus technique underpins Cardano’s functionality.

Ouroboros is the first blockchain consensus mechanism based on peer-reviewed research, distinguishing Cardano from its competitors.

Plutus, Cardano’s native smart contract language built from Haskell, works in tandem with Ouroboros. This Turing-complete language, similar to Haskell programs, powers Plutus smart contracts.

Cardano’s two-layer design increases its versatility and scalability even more. Transaction validation and cryptocurrency transfers are handled by the Cardano Settlement Layer (CSL).

The Cardano Computation Layer (CCL) is in charge of computational details such as smart contracts.

Buyers were dominant

Source: ADA/USDT on TradingView

The one-day chart of ADA showed a strong bullish performance in 2024. This led to a breakout above the three-month range that extended from $0.447 to $0.7.

This upward move was used to plot a set of Fibonacci retracement and extension levels (pale yellow).

The 50% level was at $0.629 and just beneath the lower timeframe bullish breaker block that denoted a demand zone at $0.63-$0.68.

Hence, a dip toward this region was expected, but a deeper pullback was also possible.

If prices fall below $0.629, $0.586 and $0.525 would become the next key support levels.

While the price appears to be in a retracement, the uptrend remains intact. The evidence for this came from the higher lows that ADA has formed in recent months.

Even a retest of the $0.586 level would be a higher low.

Additionally, the OBV has been on a strong upward trajectory. This meant that buying volume had been dominant and that sellers were not in control of the market yet.

The RSI remained above neutral 50 at press time. Yet the reading of 54 indicated weak bullishness at best and leaned more toward bears trying to take control in the short term.

Above the $0.7 resistance, the Fibonacci extension levels outlined the bullish targets. The $0.89 and the $1.03 levels would be the next resistance levels to watch out for once the retracement is over.

ADA holders maintain firm conviction

Source: Santiment

The price action and the volume indicators suggested that the bulls were still in control of the market despite the fluctuations of the past week. This view was corroborated by the on-chain metrics.

The MVRV ratio was near its three-month highs. This showed holders were at a profit, and also outlined bullish conviction. It also indicated the potential for selling pressure from profit-taking activity.

The dormant circulation has not seen major spikes since the 7th of March. The inference was that the token movement since then has been less pronounced, and was a sign that a wave of selling was not yet imminent.

The mean coin age continued to trend upward after seeing a dip toward the end of February. Therefore, we can say that ADA is being accumulated across the network, which is a bullish finding.

On the other hand, the active addresses count has trended downward over the past ten days as prices slipped lower.

Final word

Aside from market conditions, Cardano’s future outlook is influenced by its impending improvements and the vision of its founder, Charles Hoskinson.

Is your portfolio green? Check out the ADA Profit Calculator

The Chang Hardfork and Plutus V3 update, set to be released in the first half of 2024, are key milestones for the Cardano ecosystem.

Technical and on-chain analysis by AMBCrypto suggested that the next two to four weeks could see ADA prices drop beneath the $0.6 mark. However, in the long term, a move to $1 and beyond remained likely.