Altcoin
Will Cardano push past this phase to see greener pastures
Cardano was in a state of euphoria for most parts this year. In fact, the hype around smart contracts was such that it led to the altcoin rising by 185% in 2 months, which marked the new all-time high. However, this month particularly has been disappointing and it is now turning harmful for investors.
Cardano needs to break past the barrier
The narrow consolidation of the price that began on 20 September, does not seem to be coming to an end. For more than a month now, ADA has had $2.280 and $2.070 acting as very powerful resistance and support levels respectively.
The worry isn’t the consolidation alone, it’s the slowly declining price. While at the beginning of this month Cardano had tested the resistance frequently, in the latter half of October the support level has been tested twice as many times as the resistance.
Cardano price action | Source: TradingView – AMBCrypto
We can observe this decline resulting in the form of people losing their profits. More than 15% of all Cardano addresses that were earlier in profits have lost their profitability just in this month.
Investors have nearly stopped moving their holdings entirely because of this immobility, and consequently, transactions on-chain saw a significant plunge. In fact, transaction counts haven’t been this low since April 2020 when Cardano was just beginning to pick up pace.
Cardano transaction counts | Source: Intotheblock – AMBCrypto
What about investor movement?
Even whales and bigger cohorts have given it a rest since their transaction volumes were also at the lowest levels for almost 11 months, under $400 million.
Cardano large transaction volume | Source: Intotheblock – AMBCrypto
More than just losing profits, Cardano is losing investors as well. At the moment, despite having over 17 million addresses, only 17k of them are active on the network. Even during the May crash, these figures didn’t go below 45k.
However, ADA’s correlation to BTC was worse, at negative 0.31 right now. If these levels remain, even Bitcoin’s (possible) future rally won’t be able to push ADA back up.
Cardano’s correlation to Bitcoin | Source: Intotheblock – AMBCrypto
One good news, however, is that the network noted rising developer interest as the number of Plutus-based smart contracts went up by 170% this week.
At the moment, it is really hard to say what could help Cardano pick up again, since the results of the Cardano Summit’s hype were rather disappointing.
