Cardano (ADA) bulls have fiercely defended the $0.25 resistance level, despite the recent bearish contraction in the global crypto markets. Amid record levels of unrealized losses, can the Cardano loyalists hold out long enough to trigger some positive ADA price action?
Since the much-heralded Fed Rate announcement on June 14, prominent Layer-1 coins like Polygon (MATIC) and Ethereum (ETH) have declined by 7% and 8%, respectively. But remarkably, ADA price has gained 2% within the same period.
On-chain data indicates that Cardano investors appear unwilling to sell at unfavorable prices. But is this drop in sell-pressure enough to propel ADA out of its bearish downtrend?
Cardano Holders Are Growing Unwilling to Sell
Santiment’s Market Value to Realized Value (MVRV) data shows that most Cardano investors are now staring at record levels of unrealized losses.
Simply put, the MVRV ratio evaluates the net-financial position of investors by comparing their purchase price to the current market value of ADA.
The chart below shows that, with prices currently around $0.27, investors that bought ADA in the past month will book nearly 24% losses if they sold today.
With a net-loss position of 24%, it’s little surprise that Cardano investors largely opted not to sell during this week’s industry shake-up. This suggests that the holders could desperately be looking to keep their losses above 25%.
Quite significantly, the last time that Cardano investors assumed this level of losses was back in May 2022.
These factors indicate an apparent drop in selling pressure across the Cardano network. If that trend is sustained long enough, it will likely trigger a positive ADA price action in the coming days.
Cardano Loyalists are Showing Some Resilience
After last week’s industry-wide sell-off frenzy, long-term participants across the Cardano ecosystem are starting to demonstrate resilience.
According to Santiment’s Mean Coin Age data, there has been a network-wide accumulation trend, especially among ADA long-term investors.
In simple terms, Mean Coin Age evaluates the general sentiment among long-term investors by measuring the average number of days that coins in circulation have spent in their current addresses.
Between June 10 and June 16, the chart below shows that ADA Mean Coin Age rose sharply by 48% from 37.87 to 34.56.
When Mean Coin Age rises sharply during a price correction, it suggests a lot of investors are opting to hold their coins rather than sell at unfavorable prices.
Albeit unintended, this will likely exacerbate the drop in selling pressure and inadvertently trigger some positive price action.
ADA Price Prediction: Bulls are Eyeing $0.30
The abovementioned factors suggest that Cardano bulls are eyeing a return to $0.30. But for the bulls to be confident of the positive price action, ADA first has to surmount the $0.28 resistance.
IntoTheBlock’s IOMAP data suggests ADA price will face initial resistance around the $0.28 mark.
At that zone, it could hit a sell-wall from 39,540 investors that bought 880 million ADA at the average price of $0.28. And if ADA beats that resistance as predicted, the bulls could push the rally toward $0.30.
Conversely, the bears may invalidate the positive Cardano price action if it unexpectedly drops below the critical $0.25 support zone.
But, the 31,000 investors that purchased 248 million ADA tokens at the minimum of $0.25 will look to shore up the price. Although unlikely, ADA could further retrace toward $0.20 if the initial support level cannot hold.
In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.