Cardano closed the month of June with a price drop of 16%, continuing its downward trend that has lasted for months. This decline occurred despite significant achievements made by its ecosystem during the month.
With bullish sentiment continuing to weaken as July begins, ADA may face further downside pressure in the near term.
A great month for Cardano, but ADA's results are weak.
On June 14, Cardano founder Charles Hoskinson announced the network's plans for full integration with the XRP ecosystem, a move related to interoperability aimed at enhancing liquidity between blockchains.
Later that month, on June 25, major cryptocurrency exchange Coinbase introduced cbADA, a 'wrapped' version of ADA launched on its Layer 2 network, Base.
This move is designed to allow ADA holders to participate in decentralized applications (dApps) within the Coinbase ecosystem while remaining connected to Cardano.
However, despite these developments, ADA's price performance has been disappointing. CoinGlass data shows that the altcoin has experienced steady weekly outflows from spot markets since February, indicating continued selling pressure and waning investor interest.
In June, total weekly outflows from ADA spot markets reached $182.1 million as demand for the altcoin decreased.
When assets experience continuous outflows like this, traders and investors withdraw their assets because they lack confidence in short-term price growth.
ADA Spot Inflow/Outflow
With fewer buyers actively participating in the market and ongoing selling outpacing demand, ADA may struggle to find strong support, increasing the likelihood of further price declines in July.
Moreover, chain data shows that ADA's profit contribution ratio has continued to decline. At the time of publication, it stood at 45.97%, down 27% from last month.
This metric is an indicator of market sentiment. When the number of winning shareholders decreases, the confidence of optimistic investors weakens, leading to reduced aggressive buying and increased downside risk.
The ADA Association is facing difficulties under seller dominance.
On the daily chart, the Elder-Ray Index for ADA confirms the strong bearish trend in the market. The momentum indicator has shown consistent red bars since June 12, indicating strong seller dominance. At the time of publication, the Elder-Ray Index for ADA was -0.0204.
If sellers remain in control, this could cause the price to drop to $0.52.
ADA Price Analysis.
However, if sentiment changes and demand for Cardano renews due to new developments, the price may rise towards $0.59 as July progresses. A breakout above this resistance level could push Cardano's price to $0.64.