- At press time, Cardano was in a tight range, but it broke through important short-term resistance
- Daily active addresses have held up well, despite the downward price trend since April
In a previous report, it was revealed that 76.59% of Cardano (ADA) holders were out of the money. These statistics look healthier when looking at holders around its market price at the time of publication.
Source: IntoTheBlock
The +0.86 correlation with Bitcoin (BTC) means that ADA traders should also keep an eye on the king coin. The correlation with Ethereum (ETH) is positive but weaker, which is good news as ETH has been performing poorly lately.
Cardano Key Levels Overview
Source: ADA/USDT on TradingView
Cardano’s price action hasn’t been very inspired lately either, with a range of $0.311-$0.393 in play since early August. The mid-level at $0.352 was broken a few days ago, and bulls should be able to defend the retest as support.
The OBV has been on a slow uptrend over the past month and appears to be on the verge of setting a new high. The daily RSI has also signaled a change in bullish momentum. Therefore, ADA traders can anticipate a rally towards $0.39-0.4 on the charts.
Source: IntoTheBlock
A look at the in/out of the money statistics around the price revealed that $0.326-0.338 and $0.35-0.358 are key short-term support areas. Meanwhile, the $0.379-0.391 level is a severe supply area. These results align quite well with the price action chart.
On-chain metrics reveal market potential
Source: Santiment
The long/short MVRV difference is the difference between the 365-day MVRV and the 60-day MVRV. Therefore, negative values mean that long-term holders are suffering a significant loss relative to short-term holders.
This metric has fallen below the lowest level it reached in October 2023. This means that a potential market could now be bottoming out for Cardano. At the same time, the daily active addresses metric has remained relatively stable since April, despite the downward price trend.
To put it simply, network participation could be able to generate gains if market sentiment and price trends turn bullish. Moreover, the decline in open interest showed that speculators were not yet convinced of a strong rally.
Source: Santiment
While Cardano may be near a long-term market bottom, in the short term, the token can be interpreted as being slightly overvalued. At press time, the 30-day MVRV was positive and showed that there was a chance of selling pressure due to profit-taking activity.
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The average coin age also did not follow a significant trend, but it has increased over the past three weeks. The dormant circulation spike on September 11th caused a short-term price decline, but ADA quickly recovered.
