On November 23, the total trading volume of Cardano (ADA) reached 45.41 billion USD. Today, this volume dropped to $26.34 billion, showing that large investors in the market have minimized their exposure to this cryptocurrency.
Sometimes, situations like this suggest that altcoin prices may be negatively affected. But will that happen with the ADA?
Cardano Sees Decline in Key Areas
In the world of Cryptocurrency, large transactions record the activity of institutional players and whales, making deals worth over 100,000 USD. The increase in large trading volumes indicates stronger participation from these key partners.
Conversely, declines often indicate that institutions or whales may be liquidating their assets. In the case of Cardano, major transactions have decreased by $19 billion in the past six days.
History shows that the price of ADA typically increases in tandem with an increase in large transactions. For example, the data below shows an increase in this index from November 16 to 23.
During that period, the value of the altcoin increased from $0.57 to $1.09, suggesting that whales have played a significant role in the rise. Therefore, if the current decline continues, the Token could face further downward pressure.
Large transactions are not the only aspect of the Cardano ecosystem that is experiencing decline. According to data from Santiment, overall network activity has also decreased significantly.
On-chain metrics such as active addresses are important indicators of the health of the network. Active addresses refer to users who have ever interacted with cryptocurrencies and are still participating in transactions.
Over the past seven days, active addresses on the Cardano network have decreased, indicating a decline in user engagement. This trend reflects bearish sentiment towards ADA.
ADA Price Forecast: Adjusted To $0.82?
On the daily chart, ADA price trades around $1.04. However, the Relative Strength Index (RSI) has a reading of 76.91. RSI measures momentum by the speed and magnitude of price changes.
This indicator also shows when a cryptocurrency is overbought or oversold. When the index is above 70.00, it is overbought. Conversely, when it is below 30.00, it is oversold.
Judging by the current context, it appears that the ADA price is overbought and a decline is possible.
Bollinger Bands (BB) — an indicator that measures volatility, also confirms this bias. BB, like RSI, also evaluates if an asset is overbought or oversold. When the upper band of the indicator touches the price, it is overbought.
But when the lower band touches the value, it is oversold. With BB’s upper band nearly touching ADA, a drop to $0.82 is possible.
However, if Cardano’s trading volume increases, this may not happen. Instead, the value of the cryptocurrency could climb above $1.15.