‘Stable engagement, but…’ – Here’s what a look at Cardano’s market tells us
Cardano's recovery effort has hit a roadblock over the last few days.
- ADA declined by over 4% in the last 24 hours, despite a minor recovery
- Trend of active addresses remained steady despite this decline
Cardano (ADA) has been declining on the charts lately, disrupting any potential recovery plans it might have had in place. And, this downturn is expected to have significant implications. Particularly as the number of active addresses has not seen any substantial movement over this period.
Cardano crashes and burns
An analysis of Cardano’s (ADA) price trend on a daily timeframe chart revealed a significant recent drop. Specifically, on 2 August, ADA registered a sharp decline of 7.38%, followed by a brief bout of recovery on the charts.
Needless to say, the aforementioned price decline influenced the behavior of ADA’s short-moving average (yellow line), with the same establishing itself as a stronger resistance level at around $0.4.
The role of this moving average as resistance suggested that ADA will need to muster considerable buying pressure to break through this level and potentially initiate a trend reversal.
Despite the altcoin’s slight recovery over the last few hours, it’s worth pointing out that the Relative Strength Index’s (RSI) reading was close to 40 – An indication of bearish sentiment dominating ADA’s market.
Cardano’s active addresses stay steady
An analysis of Cardano’s daily active addresses metric on Santiment indicated a generally stagnant trend in user activity. In fact, the numbers have been oscillating between the 26,000 and 27,000 range.
This activity level is a sign of a steady but unspectacular engagement level among users within the network.
However, there was a notable albeit brief uptick in activity on 2 August, one where the number of active addresses rose to approximately 28,125. This hike, while minor, could point to a temporary surge in transactions or interactions on the network.
Interestingly, at the time of writing, there had been a significant drop in active addresses too, with the same falling to around 10,000.
A slight hike in volume
Finally, an interesting pattern seemed to emerge when analyzing Cardano’s volume.
Over the last few days, ADA’s trading volume has risen significantly. While the volume was around $280 million towards the beginning of the month, the same surged to over $400 million as the price declined on 2 August.
This volume trend and a stable number of active addresses suggest that ADA holders are in a holding pattern. They are neither panic selling in large numbers nor are new investors aggressively buying at lower prices.
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Simply put, investors may be possibly waiting for more definitive signs of either recovery or further decline from the altcoin.
