Cardano (ADA) Trading Volume Soars Despite Price Drop, Potential Buy Opportunity

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Cardano (ADA) – A Look at the Price Drop and Increase in Trading Volume

Cardano, the eighth largest cryptocurrency by market capitalization, has seen some struggles in recent days. ADA has been in a sustained downtrend for four days. An analysis of the seven- and 30-day MVRV (Market Value to Realized Value) shows similar patterns.

Increase in Trading Volume for Cardano

On January 14, Cardano’s trading volume dropped from about $600 million to about $300 million, as shown by Santiment’s data analysis. The chart showed a persistently low volume until January 23, when a surge pushed the volume to over $500 million. At the time of publication, the volume was over $560 million.

In addition, data from CoinMarketCap showed a trading volume increase of about 30% in the last 24 hours. Despite the increased trading activities, which can be seen in the volume development, the price trend shows that the volume had a negative impact on ADA.

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Cardano’s Price Trend Shows Where the Volume is Going

In the last four days, Cardano has shown a constant downtrend on the daily timeframe chart. The analysis shows that ADA has fallen by about 10% during this period. At the time of publication, the price was about $0.46, which corresponds to a decrease of 2.5% at the time of publication.

The Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI) continued to show the weakness of the price trend. At the time of publication, the RSI was below 40 and continuing to fall, indicating a strong bearish trend approaching the oversold area. In addition, the MACD was below zero, confirming the bearish signals from the RSI.

This prevailing price trend suggests that the trading volume for ADA is dominated by selling activities, with a notable increase in sales that could potentially lead to further price declines.

ADA in Loss, but…

An examination of Cardano’s 7-day MVRV on Santiment shows that holders are experiencing a double-digit loss. At the time of publication, the MVRV was about -16.6%, suggesting that holders are suffering a loss of over 16%. A parallel analysis of the 30-day MVRV showed a nearly identical scenario. The 30-day MVRV was about -17%, reflecting a loss for holders over this period.

Although the current MVRV state suggests a negative outcome for holders, it also offers a potential buying opportunity. This is because an expected price recovery will increase the MVRV, providing prospects for a positive turnaround.

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Last update: 19. February 2024

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