Cardano (ADA) price has dipped just below the $0.25 mark on Tuesday, bringing its October losses toward 12%. On-chain analysis highlights how Cardano staking activity could shape ADA price action in the weeks ahead.
Cardano’s price failed to break the psychological resistance at $0.30 after a positive start to October 2023. On-chain data reveals investors are exploring passive income protocols to limit their losses.
The Number of ADA Staked Has Reached a 90-day Peak of 22.97 billion
This week, the market valuation of ADA coins staked reached a 90-day peak of $5.7 billion (65% of the total Cardano market capitalization) as holders turn to staking protocols to mitigate losses.
As of September 28, a total of 22.4 billion ADA coins were staked across various staking platforms. Holders have since staked another 550 million ADA, bringing the total to a 90-day peak of 22.95 billion, according to StakingRewards, a staking data aggregator platform.
The staking metric offers insight into the dynamic fluctuations of coins currently held within smart contracts. Increased staking tends to impact prices positively as it temporarily reduces market supply.
Notably, historical data shows that ADA holders have often increased staking during periods of a sharp price decline and vice versa.
As this is the highest level of ADA staking activity since June 2023, the short supply could help keep the price above the $0.23 support.
Strategic Crypto Traders Are Looking to Buy the Dip
The overall sentiment surrounding the altcoin market has flipped bearish this week, majorly due to the escalating crisis in the Middle East. While long-term Cardano investors are staking, strategic new entrants are placing orders to buy more ADA, capitalizing on the falling prices.
Aggregate data from the Order Books of 10 recognized exchanges confirms that the bulls now dominate the ADA spot market.
As depicted below, bullish traders have placed active orders to buy 350 million ADA at the average price of $0.25. This is slightly higher than the corresponding 320 million ADA sell orders.
The Exchange Order Books chart captures the number of active Cardano buy/sell orders placed across recognized cryptocurrency exchanges.
As seen above, orders on the buy/bid side towers above the Sell/Ask side, with demand outpacing supply by more than 30 million ADA.
Combined with the increased staking, the available trading supply will likely drop further.
ADA Price Prediction: The Bulls Can Hold the $0.23 Support
The on-chain indicators highlighted above add credence to the position that Cardano’s price will likely hold a high support level amid the growing bearish sentiment.
The In/Out of the Money (IOM) chart, which depicts the entry price distribution of current Cardano holders, also validates this bearish prediction. It shows that the $0.24 support level could prove daunting for the bears.
As seen below, 64,000 addresses purchased 1.2 billion ADA at a minimum price of $0.24. As the most significant support cluster, that could pose a major obstacle in preventing the bears from pushing far below current prices.
But if the bearish momentum intensifies, Cardano’s price could edge closer to $0.23.
Alternatively, the bulls could seize the narrative if ADA price can reclaim $0.30. But that seems far-fetched currently, as 129,700 addresses have bought 2.26 billion ADA coins at the average price of $0.26. If they sell quickly, Cardano’s price will likely retrace.
But if that resistance level caves in, the price could rally toward the $0.30 range.
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.