Bitcoin slips from $123K peak, but here’s why bulls aren’t breaking
- Cardano bulls have been passive since May
- Distribution phase for ADA may be a concern for investors
Cardano’s [ADA] price has been trending south since late May. When Bitcoin [BTC] raced from $76k to $111.6k in April and the first half of May, Cardano rallied by a respectable figure of 46%.
And yet, this only saw Cardano reclaim the lows of the nearly six-month-old range. The subsequent price downtrend was not a welcome sight among investors. AMBCrypto’s analysis revealed that ADA traders and investors can maintain their bearish outlook.
Any Cardano price bounce would likely be quickly overwhelmed
Source: Santiment
Data from Santiment showed that while the daily active addresses remained relatively steady, the development activity has been falling since February. The drop in dev activity would be a concern for long-term investors, especially.
The 90-day MVRV ratio has been positive for nearly two months. This came after Cardano’s recovery from $0.57 in April, rallying to hit $0.8 by mid-May. The swift bounce from $0.65 to $0.72 earlier this month also saw the MVRV ratio shoot higher.
This highlighted that holders of the last 90 days were in profit, despite the deep retracement. The share of holders in profit was falling rapidly too. This meant that any attempted recovery from ADA bulls would be met with selling pressure as holders exit at break-even or a slight profit.
The mean coin age was on a downtrend too, showing network-wide distribution. This trend would need to change for Cardano to recover.
Source: ADA/USDT on TradingView
The market structure flipped bearishly on 30 May, when Cardano fell below the $0.71-level (red). The next low at $0.51 would be the immediate target. A drop below $0.51 and a retest of the same level as resistance would give a short-selling opportunity targeting the $0.427 support.
At the time of writing, a bullish recovery was not in sight. The sellers were too strong. A short-term range formation might be an early sign that a bottom was forming, but it must come alongside heightened demand,. For example, an uptrend on the mean coin age metric front.
