• Cardano (ADA) has faced a bearish trend with consistent lower highs and numerous double-top formations, leading to only 30% of ADA holders currently in profit.
  • Despite on-chain support and a surge in DeFi total value locked, ADA’s market remains under pressure with significant institutional movements and technical indicators suggesting continued volatility and resistance at higher price points.

Cardano (ADA) has recently faced a bearish trend, marked by consistent lower highs and numerous double-top formations. These technical indicators suggest a challenging period for the cryptocurrency, despite some positive on-chain developments.

A tight Bollinger Bands setup and a flat MACD signal low volatility in the ADA market. The price has struggled over the past month, but on-chain data points to robust support levels holding firm. Notably, Cardano’s total value locked (TVL) in decentralized finance (DeFi) applications has surged, reaching levels double its previous peak during the 2021 bull market​.

However, data from IntoTheBlock reveals a stark reality: only 30% of ADA holders are currently in profit. This statistic highlights the significant losses a large portion of the market has incurred amidst ADA’s recent price declines. Moreover, with 28% of ADA held by large investors, the token demonstrates a moderate level of whale control, influencing price stability and potentially increasing manipulation risks.

Over the past week, ADA has witnessed a staggering $34.46 billion in large transactions, indicating substantial movements by institutional or large-scale investors. These movements reflect active engagement in ADA with high stakes, involving both inflows and outflows that can sway the market.

At press time, ADA’s price shows a declining trend, characterized by consistent lower highs since the beginning of June. This bearish sentiment is reinforced by the tight Bollinger Bands, which indicate low volatility, and a flat MACD at zero, signifying a lack of significant bullish or bearish momentum. The chart also reveals multiple double-top formations, typically considered bearish reversal indicators.

ADA’s price currently resides below all moving averages, further reinforcing the bearish outlook. This positioning indicates downward momentum, with attempts at recovery consistently facing resistance and failing to establish new highs, conforming instead to lower peaks that highlight the double-top patterns.

Despite these challenges, the Relative Strength Index (RSI) oscillates between 50 and 60, suggesting a neutral market sentiment with a slight lean towards bullish sentiment.

What’s Next for ADA?

While ADA faces significant challenges in the short term, such as bearish technical indicators and a majority of holders in the red, there are potential positive catalysts on the horizon. The strong support levels indicated by on-chain data and the surge in TVL in DeFi applications suggest that the fundamental ecosystem supporting ADA remains robust.

Investors and traders alike will be watching closely to see if ADA can break out of its current bearish trend. A key area to watch will be whether ADA can establish a higher high, which would signal a potential trend reversal. Until then, caution is advised as the market sentiment remains mixed and volatile.

As ADA navigates these challenges, the next few weeks will be critical in determining whether the cryptocurrency can regain its footing and build momentum towards recovery.

While the current data presents a challenging picture for ADA, there are potential opportunities ahead. Investors should monitor both technical and fundamental developments closely to gauge ADA’s future trajectory amidst the broader cryptocurrency market fluctuations.