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Cardano price could stay above $0.30 as long as investors maintain this sentiment
CRYPTOS | 07/28/2023 00:42:29 GMT
Cardano price is testing a key level that has been tested as support and resistance multiple times since November 2022.
The MVRV ratio is currently below the zero line suggesting a pullback in selling, and further decline would hint at potential accumulation.
Investors are still active despite the disappointing price action, which is crucial in maintaining momentum above $0.30.
Cardano price has managed to prevent a catastrophic drawdown despite the recent decline in its market value. As the altcoin continues to rely on broader market cues for recovery, it might have to look toward its investors to ensure that until the price bounces back, ADA does not fall into the abyss of losses.
Cardano price in the hands of ADA investors
Cardano price, at the time of writing, could be seen trading at $0.308, treading just above a key level marked at $0.304. This price level has acted as a crucial support as well as a resistance level for nearly nine months since November 2022. Acting as a support floor for ADA, the altcoin bounced off of it over the past three days after noting a 14% decline since July 14, despite losing the support of all Exponential Moving Averages (EMAs).
image source
ADA/USD 1-day chart
Despite the drawdown, Cardano price still has a shot at recovery since investors are likely to refrain from selling now. The Market Value to Realized Value (MVRV) ratio, which measures the profits and losses of the investors, fell below the zero line recently. The indicator is inching closer to the -15% line, beyond which lies the opportunity zone.
Historically a decline in this area has been followed by recovery as investors tend to accumulate at the affiliated price point. Thus even if Cardano price was to find no recovery, it would still be able to make a comeback provided investors maintain their bullishness.
Cardano MVRV ratio
This bullishness is reflected in their activity as ADA tokens continue to change hands despite the price drawdown observed this month. The velocity of the third-generation cryptocurrency, which is the measure of the rate at which the asset moves through addresses, is still on the rise.
Cardano token velocity
Put simply, high investor activity will keep the price from falling below $0.304, giving it an opportunity to rise again. The Relative Strength Index (RSI) reaffirms this potential as the indicator bounced off the neutral line marked at 50.0.
The Moving Average Convergence Divergence (MACD) indicator is also noting receding bearishness on the histogram. If the MACD line (blue) moves over the signal line (red), a bullish crossover would be observed, which would suggest that Cardano price is more likely to rally going forward.
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