Cardano (ADA) has faced a lack of growth in recent weeks despite initially attracting investor attention during a brief rally.
While ADA's price movement showed some promise, the momentum faded quickly, and now, despite entering the opportunity zone, ADA holders remain skeptical, with investor participation significantly reduced.
The market value to realized value (MVRV) ratio for Cardano indicates that ADA holders who bought in the last month are currently facing losses of 12%. This decline has brought ADA into the opportunity zone, which lies between -8% and -22%. Historically, this zone has been a reversal point for ADA, offering the potential for recovery if investors choose to accumulate at lower prices.
However, despite being in an opportunity zone, there are few signs that ADA holders are acting on this opportunity. Doubts among investors, driven by the altcoin's failure to maintain recent highs, have made it difficult for ADA to take advantage of this potential recovery window.
The overall momentum of Cardano has also been affected by a decline in participation. Active addresses on the network are currently below the average threshold of 38,600, with the number at 33,700. This decrease in active addresses indicates a decline in investor participation and confidence.
During ADA's brief rally at the beginning of the month, the number of active addresses increased, but the failure to maintain this momentum has led to prevailing doubts. With declining investor participation, ADA's price may face additional challenges if interest in the asset continues to wane.
Cardano's price is currently at $0.72 after a 31% drop in the past few days. This decline followed ADA's failure to break through the $0.99 level and convert it into support. The inability to regain this critical resistance level has led to further losses, and ADA is now struggling to recover.
As ADA moves away from the $1.00 price point, it continues to face challenges in terms of investor confidence and broader market conditions. At this stage, ADA is likely to see consolidation above the $0.70 level, although a drop to $0.62 remains a possibility, especially if investor sentiment continues to weaken.
However, if ADA can convert $0.77 into support, it could signal the beginning of a recovery. Success in staying above this level could push the price towards $0.85 or higher, negating the current negative outlook. This would require renewed investor interest and a positive shift in market conditions to support ADA's upward movement.
