Cardano broke above $0.40 but quickly retraced 22% over the past two weeks. Social sentiment and the recent buying pattern of crypto whales indicate that investors may be positioning for the next rally.
Cardano shows bullish signs
On February 16, Cardano surpassed $0.41 in a bullish move that sent its year-to-date performance above 67%. However, by March 7, it had retraced 22% towards $0.32, which sent social sentiment among network participants into a downward spiral.
Blockchain analytics firm, Sentiment, has reported that mentions of Cardano in mainstream crypto media channels have decreased significantly over the past 30 days.
The chart below shows how the social dominance of Cardano decreased from 1.4% on 10 February to 0.69% on 8 March.
Social dominance monitors the share of Cardano mentions across major social media channels. Typically, a decline in social dominance indicates that most market participants are currently pessimistic, which may prompt crypto investors to buy the dip.
Another on-chain metric that points to a potentially bullish ADA price action is the recent surge in development activity on the Cardano network. It has increased by about 40% since February 1.
On-chain metrics monitor code improvements and other core technical activities on the project’s public repositories. An increase in development activity suggests a possible new wave of demand due to impending product improvements, bug fixes, or new features on the network.
ADA Price Prediction: When to Buy the Dip?
Market-value-to-realized-value provides data relevant to upcoming price actions. As shown below, most holders who bought ADA over the past 30 days are sitting on losses of around 16%. Many crypto investors may no longer be prepared to book such significant losses.
Looking at historical patterns, a 20% move towards $0.37 is expected before ADA holders start booking profits again. Thereafter, it could enter an extended rally towards the next important profit-taking zone at $0.42.
Nevertheless, if the $0.25 support does not hold, there are chances that Cardano could drop towards the 35% loss line at $0.20.
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