Cardano’s value has dropped by double digits over the past week. Currently, it is trading at $1.04, registering an 11% price drop over the period.
ADA coin has suffered from a general decline in trading activity in the broader cryptocurrency market. The main reason is due to a sharp decrease in holding period and increased selling activity from large investors, also known as “whales”.
Cardano Holding Period Decreases and Major Investors Pull Out
According to TinTucBitcoin’s analysis of Cardano’s on-chain activity, holding times for ADA coins have decreased sharply over the past week. Data from IntoTheBlock shows the index fell 48% over the period under review.
The holding period of an asset measures the average length of time that Tokens are held in the wallet before being sold or transferred. When the index falls, it indicates increased selling pressure among market participants.
This often signals a decline in confidence or a change in market sentiment towards the asset. Therefore, the decline in ADA holding periods among investors poses the risk of prolonging the short-term price decline.
Additionally, ADA whales have sharply reduced their accumulation of the coin over the past week, as shown by the 134% decrease in net flows of large investors recorded during this period.
Large investors are defined as addresses holding more than 0.1% of the total circulating supply of the asset. Their net flow measures the difference between the amount of coins they buy and sell over a given period.
The decline in net flows by large investors suggests that large investors, or “whales,” are reducing their exposure to assets, indicating a decrease in accumulation and an increase in selling activity. This reflects cautious confidence or negative sentiment among key market participants, which could impact asset price stability.
ADA Price Prediction: Bears Are Dominating
ADA’s Balance of Power (BoP) indicator on the daily chart confirms this negative outlook. As of writing, this indicator is -0.34. BoP measures the difference between buying and selling pressure in the market, helping to identify trends and potential reversals.
A BoP value below zero indicates that sellers have the upper hand, hinting at negative sentiment and the possibility that prices may continue to decline. If bear sentiment becomes stronger, ADA price could fall below $1 and trade at $0.92.
On the other hand, if the upside momentum becomes strong, ADA coin price could break above the $1.07 resistance level and return to the two-year high of $1.32.