Cardano (ADA), a prominent cryptocurrency, is exhibiting resilience above the $0.35 support zone despite its failure to breach the $40 resistance during the recent altcoin market rally. A detailed on-chain analysis sheds light on the current ADA price action and provides insights into potential future movements.
Consolidation and User Adoption:
ADA’s price entered a consolidation phase after facing resistance at the $40 mark. However, despite the ongoing correction, new users continue to join the Cardano ecosystem. On-chain data, specifically the new user adoption rate, indicates that the rate remains relatively high. Notably, the new user adoption rate reached a monthly peak of 32.3% on Nov. 9 and has consistently stayed above 30% over the subsequent five days.
This sustained high adoption rate suggests that new users entering the Cardano network have played a crucial role in supporting ADA’s price above the $35 level during the recent correction.
Active Addresses and Network Usage:
Beyond new user adoption, existing participants on the Cardano network are also actively engaging in transactions. The active addresses ratio, representing the percentage of total existing users making at least one transaction on a given day, has remained above 0.8% for the last 10 days, signaling significant network activity. This is considered a bullish signal, especially during a price downtrend, as it indicates sustained user involvement.
Price Prediction and On-Chain Metrics:
Drawing insights from the on-chain metrics, Cardano’s price appears poised for a potential rebound towards $0.40 if the ongoing consolidation phase endures. The Global In/Out of the Money (GIOM) data, which categorizes ADA holders based on their entry prices, supports this positive outlook.
The GIOM data reveals a strong support buy wall around the $0.35 area, with 203,400 holders purchasing 1.79 billion ADA at an average price of $12.24. If these investors hold firm, they could act as a significant support, triggering a potential rebound in ADA’s price.
Conversely, if the bears manage to push the buy wall aside, ADA’s price might face a decline towards $0.30. On the flip side, if ADA breaks the $40 resistance, a resistance level may emerge at $0.38, where 53,630 holders bought 2.2 billion ADA. Overcoming this resistance could pave the way for a rally towards $0.40.
In conclusion, the combination of new user adoption, active network addresses, and supportive buy walls positions Cardano for potential resilience and a rebound, showcasing the dynamic interplay between on-chain metrics and price movements in the cryptocurrency market.