Cardano’s hurdles: 3 ways long-term holders will shape ADA’s fate – AMBCrypto News

  • The price of ADA could reverse if holders prevent the token from circulating.
  • Technical analysis has identified an important support at $0.45 that could prevent a sharp decline.

Cardano’s [ADA] AMBCrypto’s analysis of the mean dollar investment age (MDIA) reveals that long-term holders are refraining from returning their tokens to circulation.

according to On-chain data According to Santiment, Cardano’s 90-day MDAI jumped to 269 on April 15th. A decrease in MDIA suggests an increase in network activity.

Historically, this has been a promising trend for ADA as holders move their assets into circulation.

On the other hand, an increase in the indicator does not, since stagnation in investments tends to limit the rise. At the time of writing, ADA’s price has regained its $0.49, joining the broader market recovery.

Cardano price rises but bearish signal

Source: Santimento

Future tasks

However, analysis of price movements shows that it is difficult to test the psychological level of $0.50 for the token.

If MDIA continues to rise, ADA may not be able to avoid $0.50, but could fall below $0.49 in the short term.

However, this conclusion may be too hasty. Therefore, AMBCrypto proceeded to evaluate other metrics. One of the metrics we checked was the average coin age (MCA).

MCA reveals a similar signal to MDIA, but with slight differences. Here, the low age of the coins means that new coins are being accumulated and ejected to cold wallets.

But if MCA increases, it means more coins have been moved into circulation.Cardano’s correlation As the age of the coin increases, it almost always becomes negative.

Therefore, despite the short-term bullish momentum, the cryptocurrency’s price was at risk of a significant decline. In a very bearish case, ADA could fall as low as $0.46.

However, if the behavior of long-term holders changes, the value could increase.

Furthermore, the Relative Strength Index (RSI) reveals that the buying momentum is not solid.

Although the RSI on the 4-hour chart rose, the value of 50.58 suggested that the bulls were not in full control.

Long-term holders increase circulation as Cardano gains momentum

Source: Santimento

Could rise to $0.53

If the buying momentum increases, ADA could break above $0.50. However, if the RSI continues to hover around the midpoint, ADA could fluctuate between $0.46 and $0.49.

From the 4-hour ADA/USD chart, the Exponential Moving Average (EMA) revealed that the bear market still exists. At the time of writing, the 50 EMA (yellow) was above the 20 EMA (blue).

This is called a death cross and usually indicates a bearish trend.

However, ADA remained above the 9 EMA, suggesting that the bulls are trying to push the price higher. As it stands, the token could reach $0.50. But it may face resistance in surrounding areas.

read cardano book [ADA] Price prediction for 2024-2025

If the closing is successful, Cardano could head towards $0.53. However, a rejection at this point could trigger another correction and eventually reach the $0.45 support.

Cardano price analysis on 4-hour chart

Source: TradingView

Meanwhile, the Elder Force Index (EFI) stalled, suggesting ADA consolidation. If EFI increases, the token may breakout. However, a decline in the indicator may confirm a decline in prices.