cardano (ADA) bulls have persistently defended the $0.25 resistance level despite the recent decline in global crypto markets. With unrealized losses hitting record highs, can Cardano loyalists hold out long enough to trigger a positive move in ADA’s price?
Since the resounding June 14 Fed Rate announcement, leading tier-1 coins like Polygon (MATIC) and Ethereum (ETH) have dropped by 7% and 8%, respectively. Remarkably, however, the ADA price gained 2% over the same period.
On-chain data shows that Cardano investors seem reluctant to sell at inappropriate prices. But is this drop in selling pressure enough to push ADA out of the downtrend?
Cardano Owners’ Unwillingness to Sell Increases
Santiment’s Market Value – Realized Value (MVRV) data, altcoin shows that most of its investors are currently facing record levels of unrealized losses.
Simply put, the MVRV ratio evaluates investors’ net financial position by comparing their purchase price to ADA’s current market value.
The chart below shows that traders who bought ADA last month, currently at around $0.27, would lose about 24% if they sold today.
With a net loss position of 24%, it’s no surprise that Cardano investors largely opted not to sell during this week’s industry shakeup. This indicates that their owners may be desperately trying to keep their losses above 25%.
It is very important that ADA investors last assumed such a loss in May 2022.
These factors indicate a significant reduction in selling pressure across the ADA network. If this trend continues long enough, it will likely trigger a positive ADA price action in the coming days.
Cardano Loyalists Show Some Resilience
After the industry-wide sales frenzy last week, long-term participants in the Cardano ecosystem are starting to show resistance.
According to Santiment’s Average Coin Age data, there is a network-wide trend of accumulation, especially among ADA long-term investors.
In simple terms, Average Coin Age assesses the overall sentiment among long-term investors by measuring the average number of days circulating coins spend at their current addresses.
The chart below shows that between June 10 and June 16, the ADA Average Coin Age increased sharply by 48% from 37.87 to 34.56.
When the Average Coin Age rises sharply during a price correction, it indicates that many investors prefer to hold their coins rather than sell at unfavorable prices.
Inadvertently, this will likely exacerbate the drop in selling pressure and unintentionally trigger some positive price action.
ADA Price Forecast: Bulls Await $0.30
The aforementioned factors indicate that Cardano bulls are aiming for a return to $0.30. However, for the bulls to be confident of positive price action, ADA must first surpass the $0.28 resistance.
IOMAP data from IntoTheBlock shows that ADA price will face initial resistance around $0.28.
In this region, it could hit a sell wall from the 39,540 investors who bought 880 million ADA at an average price of $0.28. And if ADA surpasses this resistance as predicted, the bulls could push the rally towards $0.30.
Conversely, positive ADA could invalidate price action if the bears unexpectedly drop below the critical $0.25 support zone.
However, 31,000 investors who bought 248 million ADA tokens for at least $0.25 will try to support the price. Although unlikely, ADA could pull back towards $0.20 if the initial support fails to hold.
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