On-chain data shows a decline in network activity, with active addresses falling from 51,000 to 32,700, signaling reduced user engagement and bearish sentiment.
On the weekly chart, Cardano price ADA $0.64 24h volatility: 7.2% Market cap: $22.99 B Vol. 24h: $1.12 B has seen a sharp drop of more than 18% amid the broader crypto market crash. However, on-chain metrics also show signs of concern as the overall network activity has been on a decline as well.
Following the rally all the way to $1.30 in early December, Cardano price has been moving sideways with steep correction. As of now, the ADA price is trading at $0.88 amid notable sell-offs. While Cardano holders might be expecting a potential rebound, on-chain data from the In/Out of Money Around Price (IOMAP) indicator suggests challenges ahead.
Data from IntoTheBlock reveals significant resistance for ADA at the $0.92 level. At this price point, 58,470 Cardano addresses have accumulated 951.02 million tokens, surpassing the volume of tokens held in profit within the $0.74 to $0.88 range. Thus, if the buying pressure remains low, the Cardano price could struggle to register a push upwards.
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Source: IntoTheBlock
Cardano Network Activity Sees a Drop
Blockchain analytics firm Santiment reported that Cardano’s network activity has been on the fall suggesting a bearish sentiment for ADA. On December 16, the 24-hour active address count exceeded 51,000 but has since dropped to 32,700.
Active addresses represent wallets participating in successful transactions — either sending or receiving — within a specific timeframe. Typically, an increase in active addresses signals growing user activity, which often correlates with bullish price action. The current decline, however, points to reduced engagement, reinforcing the bearish outlook for ADA.
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Source: Santiment
On the daily chart, ADA’s price has slipped below the 20-day EMA (blue), signaling a bearish trend. Additionally, the token is currently hovering near the 50-day EMA (yellow), highlighting a critical support zone.
This positioning suggests that Cardano is at risk of breaking its $0.88 support level. If this support fails, ADA’s price could decline further to $0.77. In an extended bearish scenario, the altcoin might drop as low as $0.55. However, if Cardano bounces back from $0.88, it can lead to a further rally ahead.
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Source: TradingView
A Bullish Take on ADA
Crypto analyst Ali Martinez has drawn attention to striking similarities between Cardano’s (ADA) current price movement and its previous market cycle. According to Martinez, the ongoing correction mirrors a key event from 2020, when ADA experienced its first significant pullback after a bull rally.
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Source: Ali Charts
“Cardano $ADA is following an eerily similar pattern to its previous cycle. Back in 2020, the first major correction after the bull rally began happened at the very same time as the correction we are experiencing today,” noted the analyst.
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