Cardano (ADA) has the potential to be influenced by its long-term holders who can control the token’s supply and demand by keeping their tokens out of circulation. Technical indicators suggest a positive outlook for the midterm to long term.
According to technical analysis, the decisions of long-term investors play a significant role in determining the future of Cardano (ADA), and recent trends have shown that the $0.45 level is a strong support level, making it an excellent buying opportunity.
As of now, ADA is trading at $0.4622 after experiencing a 4.5% decrease in the last 24 hours. This extends its weekly losses to 24% as the overall market experiences a bearish trend. Over the past 7 days, ADA has been trading between $0.4175 and $0.6219. With prices revisiting recent lows, smart investors see this as a chance to accumulate at discounted prices.
On-chain data indicates that the actions of long-term investors will heavily influence the bullish or bearish direction taken by the altcoin. Supporting its bullish outlook is an increase in Cardano’s network activity. Data from Santiment shows that the Mean Dollar Invested Age (MDIA) for the past 90 days reached 269 on April 15th. A lower MDIA typically signifies more network activity.
Furthermore, analyst Ali Martinez has identified a striking similarity between ADA’s current price pattern and its behavior from 2018 to 2021. Martinez highlights a fractal pattern in ADA’s price movement, suggesting a potential surge of up to 2000% if historical trends repeat themselves. This consolidation phase could lead to a new all-time high for ADA.
However, it is evident that bulls are struggling to break the 0.50 resistance level, which is crucial for maintaining bullish momentum in the long term. The Relative Strength Index (RSI) indicates slow buying momentum, suggesting little expectation of a price rebound in the short term.
The Mean Coin Age (MCA) reflects network activity, with a low MCA suggesting new coins are being bought and held, possibly in cold storage. On the other hand, a rising MCA indicates existing coins entering circulation. Interestingly, Cardano’s price has often declined when the MCA increases.
The Elder Force Index (EFI) has reached a plateau, indicating that ADA may be consolidating its recent gains. An increase in the EFI could signal a potential price breakout, while a decrease could indicate a price decline.
Overall, Cardano’s long-term holders and their decisions will play a significant role in shaping the future of the token. Technical indicators point to a positive outlook, but short-term resistance and slow buying momentum may pose challenges for the bulls.