- Resistance at $0.53 could hinder ADA’s rebound.
- Cardano’s transaction volume has decreased, but its social dominance has increased.
The value of Cardano (ADA) has fallen 18.45% since the beginning of the year, according to CoinMarketCap data.
However, AMBCrypto’s assessment of the price tracking platform shows that the price has increased by 3.60% in the last 24 hours. This increase brought ADA back above $0.50.
Despite this increase, on-chain data has revealed some interesting things happening on the Cardano network. The first was a 24-hour active address.
Activities take a backseat
Active addresses increased to 45,000 on February 1, according to Santiment. But by press time, the indicator had plummeted to 40,400.
Active addresses show the number of wallets involved in incoming and outgoing transactions. A surge in active addresses mostly, but not always, has a positive impact on cryptocurrencies. Therefore, we can assume that Cardano is at near-term downside risk due to the recent decline.
Source: Santiment
However, indicators alone cannot determine whether the price of ADA will rise or fall. This is why AMBCrypto decided to investigate its price potential from a technical perspective.
According to the ADA/USD 4-hour chart, the token was close to the support level on December 8. Afterwards, the price of ADA soared to $0.64.
However, this time it seemed like a big difference due to resistance at $0.53. Buying pressure must increase for ADA to overcome resistance.
ADA may have a hard time rising
According to the MACD (Moving Average Convergence Divergence) indicator, ADA’s numbers were negative. This means momentum is bearish.
Additionally, the 12-day EMA (blue) was lower than the 26-day EMA of 9 (orange). If these indicators remain the same, ADA may not be able to repeat December’s upward trend.
Moreover, OBV (On Balance Volume) also remained at the same level, indicating a lack of buying pressure. In a very optimistic case, ADA could surge to $0.53 or $0.55.
However, signals from the indicator suggest that the ADA price may plateau at $0.50 or move below it.
Source: TradingView
In terms of volume, Santiment has seen a decline in metrics. For example, Cardano’s trading volume was 586.31 million as of January 30. However, at the time of this writing, the number has dropped to 341.26 million.
This decline suggests that interest in the ADA has subsided. Regarding the price action, the decreasing volume and rising price suggest that the token may soon weaken.
Read 2023-2024 Price Prediction for Cardano (ADA)
Moreover, Cardano’s social dominance soared to 2.95%. This means there is a lot of discussion going on about tokens. From a price perspective, high social dominance may be a symbol of the region’s highest level.
Source: Santiment
As things stand, ADA’s bearish outlook outweighs its optimistic outlook. Therefore, traders may have to wait a little longer before ADA rises much higher.