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Cardano – Analyzing price decline, volume surge, and more

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Cardano, the eighth-largest asset by market capitalization, has been having a hard time in the past couple of days.

Cardano's downtrend blues: Analyzing price decline, volume surge, and holder opportunities

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  • ADA continues on a four-day consecutive downtrend.
  • Seven- and 30-day MVRV shows similar patterns.

Cardano [ADA] has experienced a notable increase in its trading volume lately. While this may initially seem like a positive development for ADA, the corresponding price trend reveals why it may not be as encouraging as it appears.

Cardano volume picks up steam

On 14th January, Cardano’s trading volume declined from around the $600 million range to around $300 million, as revealed by the analysis of data on Santiment.

The chart showed a sustained low volume until around 23rd January, when a surge occurred, pushing the volume to over 500. As of this writing, the volume was over $560 million. 

Cardano volume

Source: Santiment

Additionally, CoinMarketCap data showed a roughly 30% increase in volume over the last 24 hours. Despite the increased trading activities suggested by the volume trend, the price trend showed that the volume had a negative impact on ADA.

Cardano price trend shows where all its volume went

Over the past four days, Cardano has shown a consistent downward trend on the daily timeframe chart. Analysis showed that ADA has fallen by around 10% during this period.

As of this writing, it was trading at around $0.46, reflecting a 2.5% decline at the time of writing. The Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI) further showed the weakness in the price trend. 

ADA/USD price trend

Source: Trading View

As of this writing, the RSI was below 40 and still descending, signaling a strong bearish trend approaching oversold territory.

Additionally, the MACD was below zero, corroborating the bearish signals from the RSI. This prevailing price trend suggests that the trading volume for ADA is dominated by selling activities, with a notable increase in dumps, potentially leading to further price declines.

ADA at a loss, but…

An examination of the Cardano 7-day Market Value to Realized Value ratio (MVRV) on Santiment showed that holders were enduring a double-digit loss.

As of this writing, the MVRV was around -16.6%, indicating that holders are experiencing a loss of over 16%.

A parallel analysis of the 30-day MVRV showed a nearly identical scenario. The 30-day MVRV was around -17%, reflecting a loss for holders over this period. 

Cardano 30-day and 7-day MVRV

Source: Santiment


Realistic or not, here’s ADA’s market cap in BTC terms


While the current MVRV state suggests a negative outcome for holders, it also presents a potential buying opportunity.

This is because an anticipated price recovery will increase the MVRV, offering prospects for a positive turnaround.

 

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Adewale is a full-time journalist at AMBCrypto. While he is increasingly fascinating by the world of blockchain and cryptocurrencies, Adewale holds a degree in International Relations. Besides working on insightful articles that touch upon the crypto-space's hottest issues, he finds joy in supporting Manchester United and Afrobeat music.
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