Only 24% of Cardano (ADA) holders are making money at the current prices. But on-chain data shows that ADA price is approaching the 200-day simple moving average for the first time in nearly a year. So can the Cardano bulls flip the bears in the coming days?
Cardano suffers 5% Correction Amid Decline in Transaction Volumes
The impressive 64% gain for Cardano at the start of the year has been cut by 5% in the last seven days. The marginal downward trend appears to be due to the declining daily transaction volumes and Bitcoin correction.
IntoTheBlock data shows that the number of daily transactions on the Cardano network has declined in unison with the price of ADA. Since the start of Feb. transaction count has fallen by 28%.
Historically, a fall in the frequency of transactions on the Cardano network has correlated with periods of ADA price downtrend.
Can ADA Pull out of the Bearish Bitcoin Snare?
Another critical factor contributing to the recent ADA price correction is its 96% correlation to BTC prices.
The correlation between ADA and BTC has grown tighter since mid-Jan. And with a pensive social sentiment surrounding Bitcoin this month amid a recent drop in whale activity, it has caught ADA and other closely correlated alts in a bearish snare.
Will Cardano Flip the 200-Day Average to Start a Mid-Month Rally?
It is not all doom and gloom for the Cardano price this month. The ADA token price is approaching its 200-day simple moving average for the first time in a year. This could set an optimistic turn of events in motion.
ADA closed at $0.39 on Feb 8 to hit the 200-day SMA. For many investors, when an asset price crosses its 200-day simple moving average, it is a prime signal for an impending bullish turn.
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.