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Cardano (ADA) Investors Pinning Hopes on $1.87 Billion Profits May Be Expecting Too Much

2 mins
Updated by Daria Krasnova
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In Brief

  • Cardano's price may find it challenging to reach $0.39 as the GIOM reveals a significant supply zone that could hinder further price gains.
  • The ADA/USD daily chart shows that, in comparison to the bearish dominance, buyers are still struggling to match the dominance of sellers.
  • If the $0.42 resistance holds, ADA could drop to the $0.34 support level; failing to maintain that support may lead to a further decline to $0.31.
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Cardano’s (ADA) price has increased by a modest 3.85% in the last 24 hours. This hike has brought back hopes that the altcoin could produce gains for investors who purchased the token at a higher value than its current price.

While optimism surrounds ADA’s potential growth, technical and on-chain data suggest that such ambitious profit targets might be unrealistic. Here is why.

Cardano Sets Holders Up for Disappointment

Cardano’s recent increase has ensured that the price did not pull back to $0.30. While it trades at $0.36, the Global In/Out of Money (GIOM) shows that those who accumulated ADA between $0.36 and $0.39 are still holding at a loss.

For context, the GIOM categorizes addresses and volumes based on their profitability. By showing this aggregate, the indicator can spot resistance and support areas that could either help accelerate the upswing or invalidate it.

Typically, the larger the volume (clusters), the stronger the support or resistance. As seen below, 373,000 addresses that accumulated 5.21 billion ADA at an average price of $0.37 are out of the money. At current prices, this volume is worth $1.87 billion and is larger than those holding ADA in profits, which purchased around $0.35.

Read more: How To Buy Cardano (ADA) and Everything You Need To Know

Cardano price faces potential decline
Cardano GIOM. Source: IntoTheBlock

Based on the conditions above, it is highly unlikely that ADA will reach $0.39 in the short term due to this supply zone. As such, some of these Cardano investors might fail to achieve the profitable status desired.

Another indicator suggesting a Cardano price decrease is the Bull Bear Power (BBP). The BBP compares the strength of buyers (bulls) with that of sellers (bears). When the indicator’s reading is green, buyers are in control, but if it is in the red, sellers are dominant.

On the daily chart, there is a slight green histogram bar. However, it is nothing compared to the red ones, suggesting that bulls are yet to match bearish control.

Cardano bears have the upper hand
Cardano Bull Bear Power. Source: TradingView

ADA Price Prediction: No More Appreciation

Following its recent jump, ADA is approaching two major supply zones: one at $0.42 and the other around $0.50. An analysis of the daily chart shows that Cardano might face resistance around $0.37.

If validated, this could send the token’s value down to $0.34 support. If bulls fail to defend this support, ADA’s price might see another decline, and the cryptocurrency’s value could tank to $0.31.

Read more: 6 Best Cardano (ADA) Wallets You Should Consider in October 2024

Cardano price analysis shows potential decrease
Cardano Daily Price Analysis. Source: TradingView

On the flip side, Cardano could resist going down to that point if the strength of buyers improves. Should that be the case, the Cardano’s price might breach $0.42 and head toward $0.50.

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Disclaimer

In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

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Victor Olanrewaju
Victor Olanrewaju is a technical and on-chain analyst at BeInCrypto, where he monitors the activities of mid- and large-scale investors, commonly known as crypto whales, to detect investment trends across diverse cryptocurrencies, including Bitcoin, altcoins such as Solana, XRP, Cardano, and Toncoin, as well as meme coins like Dogecoin, Shiba Inu, and Pepe. Additionally, he covers emerging trends including Tap-to-Earn games, AI tokens, and real-world assets (RWA). Before joining BeInCrypto...
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