Down but not out: Cardano price might be primed for a comeback
- Cardano price is set to witness a potential trend reversal provided it flips $0.3043 into a support floor.
- The altcoin has not lost its investors’ interest as both retail and whale holders have been constantly adding to their wallets.
- Their presence on the network, however, is concerning as active addresses hit a 12-month low this week.
Cardano price is seemingly bouncing back even though the broader market is still far from noting an alt season. The ADA holders have been both a boon and a bane in this recovery, preventing any significant decline but also keeping the altcoin from witnessing an immediate recovery.
Cardano price nears key level
Cardano price has been on a decline for the past three weeks after noting the highest single-day rise in its history – 23% in mid-July. Falling by 18% since then, the cryptocurrency is now looking to recover its losses and might be able to, provided it finds sufficient support from its investors.
ADA holders have consistently added more tokens to their wallets for the past two months. The accumulation did not slow down despite the recent drawdown as both retail and whale, aka large wallet holders, have observed an increase in their supply.
This is visible in the different cohorts holding between 1,000 ADA to 10 million ADA, encompassing nearly 19 billion ADA worth $5.7 billion at the current market value of the asset.
 [19.07.23, 09 Aug, 2023]-638271939384070517.png)
Cardano supply distribution
But their presence on the network has not been as spectacular, with the active addresses ranging in the lows of 70k on average. This has been the weak link in Cardano price recovery, and over the past week, the number of addresses conducting transactions on the chain dropped to as low as 30k, marking a yearly low.
 [19.07.29, 09 Aug, 2023]-638271939547744537.png)
Cardano active addresses
However, ADA has the chance to bounce back, as indicated by the price indicators. Both Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) indicators are signaling potential bullish signals at the moment. If the RSI flips the neutral line at 50.0, ADA might find increased demand, likely pushing the price higher.
Similarly, the MACD line (blue) crossing over the signal line (red) could suggest a change in trend as a bullish crossover would be marked. This is also evident in the receding bearishness on the histogram.
ADA/USD 1-day chart
Nevertheless, to sustain any recovery, Cardano price would need to flip the 50-day Exponential Moving Average (EMA) into a support floor. In doing so, the price level marked at $0.3043 would also flip into support which has been a key level in the past for ADA.
Bitcoin, altcoins, stablecoins FAQs
What is Bitcoin?
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
What are altcoins?
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
What are stablecoins?
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
What is Bitcoin Dominance?
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
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Author
Aaryamann Shrivastava
FXStreet
Aaryamann Shrivastava is a Cryptocurrency journalist and market analyst with over 1,000 articles under his name. Graduated with an Honours in Journalism, he has been part of the crypto industry for more than a year now.
