Cardano network’s active addresses and new addresses reveal bearish divergence.
ADA traders are likely to sell the altcoin as potential profits increase,solana etf reddit as seen in the MVRV metric.
Cardano price erased its weekly gains, dropping to $0.3617, early on Tuesday.
Cardano holders brace for the possibility of a correction in ADA price as on-chain metrics of the smart contract blockchain token turn bearish. ADA price could decline in the short-term as traders engage in profit-taking.
Cardano price at risk of correcting lower
The Cardano price trend’s evolution can be illuminated by examining on-chain metrics. The bullish/ bearish outlook is evident from metrics like Active Addresses and Market Value to Realized Value (MVRV), among others.
For Cardano, while ADA price climbed between November 2 and 11, the Active Addresses and New Addresses were on the decline. This is an example of a bearish divergence, as seen in the chart below. Data from Santiment supports a bearish thesis for Cardano price.
Cardano Active Addresses and Price, Source:Santiment.
Cardano New Addresses and Price, Source: Intotheblock.
MVRV, the on-chain metric that helps determine the average profit/loss of investors who purchased ADA over the past month, climbed to a local peak of 18.61% on November 10. MVRV is 8.68% on November 14. It can be concluded that ADA traders who acquired the asset within the past thirty days have sold and realized their profits, the metric therefore fuels a bearish outlook for Cardano price.
MVRV Ratio (30 days) and price,Source: Santiment.
According to data from IntoTheBlock’s Global In/Out of the Money (GIOM) indicator, which shows the volume of buyers at different price levels, 52.31% addresses holding 17.99 billion ADA tokens are currently in profit.
Cardano price is likely to find support between the $0.34 and $0.36 levels, where 203,390 addresses scooped up 1.79 billion ADA tokens.
ADA price faces resistance between $0.36 to $0.37. Once the $0.37 level has been flipped into support, the next resistance is between $0.37 and $0.38, where 53,610 addresses acquired 2.2 billion ADA tokens, as seen in the chart below.
Global In/Out of the Money indicator, Source:Intotheblock.
At the time of writing, Cardano price is $0.36, on Binance. ADA price is up 2.24% on the day, and remained nearly unmoved over the past week.