Cardano: 70% of ADA holders in the red – What comes next?

ADA has been experiencing a bearish trend recently, marked by consistent lower highs and multiple double-top formations. The volatility in ADA’s price seems to be low, with tight Bollinger Bands and a flat MACD indicating stability. Despite a weak performance in the past month, Cardano [ADA] has shown signs of strong support according to on-chain data.

Additionally, the network has seen a rise in total value locked (TVL) in DeFi applications, reaching levels twice its peak during the 2021 bull market. However, only 30% of ADA holders are currently in profit, indicating that a significant portion of the market is facing losses. With 28% of ADA held by large investors, there is a moderate level of whale control in the token, which could influence price stability and potential manipulation risks. The recent high volume of large transactions suggests active engagement from institutional or large-scale investors.

Despite the declining trend in ADA’s price, there is potential for a slight bullish sentiment as indicated by the RSI oscillating between 50 and 60.

Vocabulary Insights

1. Bearish trend /?b?r?? tr?nd/ (noun): A period in which the prices of securities are falling or are expected to fall.
2. Lower highs /?lo??r ha?z/ (noun): A pattern in technical analysis where each successive peak is lower than the previous one, indicating a downward trend.
3. Double-top formations /?d?b?l t?p f?r?me???nz/ (noun): A bearish technical reversal pattern where an asset’s price reaches a high, pulls back, and then tests that high again before falling.
4. Bollinger Bands /?b?l?nd??r bændz/ (noun): A technical analysis tool defined by a set of trendlines plotted two standard deviations (positively and negatively) away from a simple moving average of a security’s price.
5. MACD /mæks?d?d/ (noun): Moving Average Convergence Divergence, a trend-following momentum indicator that shows the relationship between two moving averages of a security’s price.
6. Total value locked (TVL) /?to?tl ?vælju l?kt/ (noun): The overall value of assets deposited in a DeFi protocol.
7. DeFi /?di?fa?/ (noun): Decentralized Finance, financial applications in cryptocurrency or blockchain that aim to disrupt financial intermediaries.
8. Whale control /we?l k?n?tro?l/ (noun): The influence exerted by large holders of a cryptocurrency, known as whales, on its price and market dynamics.
9. Bullish sentiment /?b?l?? ?s?nt?m?nt/ (noun): A market sentiment that indicates that prices will rise.
10. RSI /??r?s?a?/ (noun): Relative Strength Index, a momentum oscillator that measures the speed and change of price movements.