Cardano’s value has declined by double digits over the past week. It currently trades at $1.04, recording an 11% price drop during that period.
Apart from the general decline in trading activity in the broader cryptocurrency market, the ADA coin price drop is attributed to a dramatic decrease in holding time and a surge in selling activity from large investors or whales.
Cardano’s Holding Time Drops and Large Holders Scale Back
BeInCrypto’s analysis of Cardano’s on-chain activity reveals a sharp decline in the holding time of transacted coins over the past week. According to IntoTheBlock’s data, this metric has plunged by 48% during the period under review.
An asset’s holding time measures the average duration its tokens are held in wallets before being sold or transferred. When this metric declines, it suggests increased selling pressure among market participants.
This often signals waning confidence or a shift in market sentiment toward the asset. Therefore, the drop in ADA holding time among its investors puts it at risk of extending its price decline in the short term.
Cardano Coin Holding Time. Source: IntoTheBlock
Further, ADA whales have significantly reduced their coin accumulation during the week in review, as reflected by the 134% decline in large holders’ netflow recorded within that time.
Large holders refer to addresses that hold over 0.1% of an asset’s circulating supply. Their netflow measures the difference between the coins they buy and sell over a specific period.
Cardano Large Holders’ Netflow. Source: IntoTheBlock
A decline in an asset’s large holders’ netflow indicates that major investors or whales are reducing their inflows to holdings, suggesting lower accumulation and selling activity. This reflects a cautious stance or bearish sentiment among influential market participants, which may impact the asset’s price stability.
ADA Price Prediction: The Bears Are In Control
ADA’s Balance of Power (BoP) on a daily chart confirms this bearish outlook. As of this writing, the indicator is -0.34. The BoP indicator measures the strength of buying versus selling pressure in the market, helping identify trends and potential reversals.
A BoP value below 0 indicates sellers dominate the market, suggesting bearish sentiment and potential downward price movement. If the bearish sentiment strengthens, ADA’s price could fall below the $1 mark and trade at $0.92.
Cardano Price Analysis. Source: TradingView
On the other hand, if momentum becomes bullish, the ADA coin price could break above the $1.07 resistance level and reclaim its two-year high of $1.32.
