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Cardano: Can you still ‘buy the dip’?

2min Read

While ADA’s price recovered from the market heat of the past week, the token has been hit with selling pressure. But how soon will another chance present itself?

Cardano: Can you still buy the dip?

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  • Despite the hike in volume, ADA may have hit an overbought level.
  • The price-DAA divergence revealed that ADA could be close to an entry point.

Although the crash in Cardano’s [ADA] price initially spelled disaster for token holders, it was also the foundation laid for some yearly highs. According to Santiment, several on-chin metrics, including the volume and active addresses, hit their peaks as ADA recovered between 10 and 11 June.

Is your portfolio green? Check the Cardano Profit Calculator

This hike suggested that there was an increase in transactions and utility on the Cardano network. The price increase, which almost hit 10% within a day, implied a surge in buying pressure. Additionally, it continued to enhance ADA’s overall out-performance of other altcoins.

The drawdown could be a chance to…

While the price of ADA has fluctuated of late, the token was still down by 21.23% (until press time) in the last seven days. Perhaps it could be a good idea to evaluate whether ADA’s price levels present a favorable opportunity to enter the market.

Based on the daily chart, ADA has failed to cross the $0.385 mark since 6 May. Even during a period where it experiences high accumulation, the resistance remained solid, thus pushing back the price.

However, recent selling pressure has affected the value, leading to the price dropping to $0.278. But at press time, bulls were attempting to push the price back to the $0.3 region. Still, this depends on how long the support at $0.262 would hold. 

Meanwhile, the Chaikin Money Flow (CMF) remained in the positive region. At 0.50, the CMF indicated the market was in an uptrend.

Cardano [ADA] price action

Source: TradingView

Since the value had crossed 0.20 at the time of writing, it could signal that ADA was overbought and the price could continue retracement. Thus, it could be dicey to consider that ADA’s price at this point could be a good entry point for the short term.

DAA outpaces ADA’s price

As for the price-Daily Active Addresses (DAA) divergence, Santiment showed that it was -27.27%. Historically, the metric can be instrumental in defining entry and exit points. 

For context, this metric explains the relationship between the price and DAA while assessing the way the broader market values a token.

Read Cardano’s [ADA] Price Prediction 2023-2024

This, however, depends on the directional movement of the DAA and price, respectively. Usually, a higher increase in the price than the DAA has proven to be an exit point. And when the price decreases more than the DAA, the same happens.

But with ADA, the DAA was outpacing the price. Therefore, ADA’s price at press time could be close to a short-term entry point, provided the market doesn’t experience significant shake-ups.

ADA price-DAA divergence

Source: Santiment


Victor Olanrewaju is a full-time journalist at AMBCrypto. Settled in Lagos, his fascination with blockchain technology and the cryptocurrency market arose out of his love of freedom and everything free. As a Nigerian, Victor understands the impact unfounded financial restrictions have on a population. He sees Bitcoin and cryptos as a way to circumvent these obstacles, as a tool for value creation despite all the setbacks. A graduate in Physics, Victor previously worked as a Senior Marketer at Melange Technologies. Before that, he dealt with crypto-marketers on a regular basis in his capacity as Copywriter at Ventrix Media. At AMBCrypto, Victor’s focus is on assessing the real effectiveness of both on-chain and off-chain developments on a project and its community sentiment.
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