Cardano’s price has fallen 3% over the past 24 hours, mirroring the crypto market’s cooldown. The decline comes as overall trading activity sees a slight pullback, affecting several major altcoins.
However, despite the dip, on-chain data suggests a potential bullish reversal for the ADA token could be on the horizon.
Investor sentiment around ADA remains notably optimistic. According to Santiment, the coin’s weighted sentiment is at 1.33 and in an uptrend as of this writing.
This indicates that ADA traders and investors are still confident about the coin’s mid-term prospects despite the price decline.
The weighted sentiment is a metric that analyzes social media and online platforms to determine the overall tone or feeling (positive or negative) surrounding a cryptocurrency. When its value is negative, it indicates that overall market sentiment regarding the asset is bearish, with more negative discussions and outlooks outweighing positive ones.
On the other hand, when its value is positive, the market sentiment toward the asset is bullish, and traders are taking positions that would aid its price rally.
Further, ADA’s Network Realized Profit/Loss metric is in decline, showing that a significant portion of ADA holders are currently at a loss as its price dips.
Historically, when traders are in the red, they tend to hold rather than sell, reducing overall selling pressure. This behavior could trigger an ADA price rebound, particularly when combined with the above positive sentiment indicator.
Readings from the daily chart show that ADA has oscillated within a range since May 10. Over the past three days, the altcoin has faced resistance at $0.84 and found support at $0.76.
The current positive sentiment and the reluctance to sell at a loss may drive a surge in new demand for ADA, pushing its price past the $0.84 resistance and toward $0.92.
However, if the ADA token extends its decline, the price could fall to $0.76, breach it, and plunge toward $0.66
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