Cardano (ADA) is trading at $0.33, showing a 7% drop over the past week. Despite this decline, investors are still interested. Here’s why:
- Strong Buying Activity: Over $70 million worth of buy orders have been placed for 220 million ADA tokens. This is much higher than the $52 million in sell orders, suggesting strong confidence in ADA.
Network Activity and Trading Volume
Increased Trading Volume: Cardano’s daily trading volume has jumped by 44%, reaching $223 million. This surge in trading suggests growing interest and engagement.
Rising User Engagement: More new addresses and active wallets indicate that more people are getting involved with Cardano, which is a positive sign for its future.
Read Cardano price prediction: Will ADA Price Hit $1?
MVRV Indicator Insights
Current MVRV Long/Short Difference: The Market Value to Realized Value (MVRV) Long/Short Difference is at -20%. This metric shows that short-term holders are currently making profits, while long-term holders might not be.
Short-Term Holder Activity: Short-term investors hold around 5.7 billion ADA, worth over $1.9 billion. These investors usually sell quickly, which can lead to potential price drops if they decide to cash out.
Potential Risks
- Sell-Off Risks: The high concentration of ADA among short-term holders means there’s a risk of a rapid sell-off. This could increase the downward pressure on Cardano’s price.
While Cardano shows positive signs with increased network activity and buying interest, the dominance of short-term holders might pose risks. If these investors start selling, it could affect Cardano’s ability to climb back into the top ten cryptocurrencies. Keep an eye on market trends to see how this plays out.