Cardano (ADA) has recently witnessed a sharp decline, wiping out the gains made earlier in the month. This downturn is raising significant concerns within the ADA holder community, particularly with long-term holders (LTH), who are gradually pulling away from the market.
Increased selling pressure, combined with fears of further losses, poses a significant threat to the value of Cardano.
The shift in LTH behavior
Recently, a sudden increase in the 'age consumed' metric indicates that Cardano's LTH is actively liquidating their positions. This is the largest increase in the past nine months, reflecting a decline in trust within the investor community. The 'age consumed' metric tracks the movement of coins that have not been traded for a long time, and this increase means that LTH is deciding to sell.
This could have a significant impact on the stability of Cardano. When the LTH group starts selling, it is often a sign of a shift in market sentiment, easily eroding the confidence of other investors, especially in a market under bearish pressure.
The selling action from the LTH group is concerning not only because it often has a strong impact on price movements but also because it exerts serious bearish pressure. When this group of investors withdraws funds, the market no longer has enough buying power to sustain an upward trend, making it difficult for Cardano to regain recovery momentum in the near future.
In addition to the selling pressure from LTH, weakness in investment inflows is also reducing Cardano's overall momentum. The Chaikin Money Flow (CMF) indicator, which measures the accumulation and distribution of assets, is currently maintaining below 0. This shows that capital inflows into the market are very weak, hindering any attempts to recover ADA's price.
The lack of new capital further complicates Cardano's ability to recover and stabilize, even as some traders continue to sell. This loss of confidence is also clearly reflected in the overall market sentiment. With the CMF indicator still below 0, the likelihood of a price reversal in the short term is almost non-existent, and Cardano's future outlook remains quite bleak.
ADA price needs to hold $0.6
Currently, Cardano is trading around the support level of $0.6 after a 17.6% drop in the past week. However, with selling pressure still increasing and weak market conditions, this altcoin faces the risk of continuing to decline further. If the downward trend persists, ADA's price could fall to the next important support level at $0.57.
If Cardano cannot maintain the $0.6 support level, selling pressure will continue to push the price down further, leading to heavier losses for investors and potentially increasing pessimism in the market. With the lack of confidence from LTH, ADA's price becomes more vulnerable in the coming days.
However, if it can hold steady and bounce back from $0.6, this altcoin could regain growth momentum, helping ADA aim for the local support level of $0.66. If selling pressure gradually decreases and investor confidence is restored, Cardano could return to $0.7, thereby weakening the bearish scenario in the future.