The crypto landscape quickly turned red as Bitcoin extended the correction from $70,000 to close in on $60,000. Altcoin majors like Ethereum, Solana, XRP, and Toncoin followed as headwinds intensified, reflecting a weakening technical structure for Cardano’s price this weekend.
Cardano faces external geopolitical tensions and dwindling sentiment even as chances of several rate cuts expected in 2024 shrink due to fears of a recession in the United States.
Low Network Activity Predicts Further Cardano Price Decline
A noticeable decrease in the number of new addresses joining the network over the last two months could further squeeze ADA’s lifeline. Blockchain data from IntoTheBlock shows a 48% drop in unique addresses from 14,700 to 7,650 from the beginning of June to early August.
Generally, declining network activity implies a subsequent decrease in demand, depriving ADA of price momentum to sustain recovery attempts. The addresses’ metric from IntoTheBlock highlighted a similar trend in the total number of addresses, which is currently at 4.45 million, down from 4.46 million in February.
The prevailing technical structure in the daily time frame shows weakness. Bulls are looking forward to a heated battle, especially since most indicators favor an extended correction under $0.35 support.
Multiple sell signals call on traders to short ADA, starting with the Moving Average Convergence Divergence (MACD) and a recently confirmed death cross pattern.
A death cross sends a bearish signal when a short-term moving average flips below a long-term one. In the ADA price case, the 20-day Exponential Moving Average (EMA) crossed below the 50-day EMA, increasing the chances of a medium-term bearish trend playing out.
Cardano price also holds under all three moving averages, including the 200-day EMA, which marks the resistance at $0.4572. Bulls must set camp at $0.35 support because if it is broken and further destabilizes the technical structure, the drop to $0.3 would be drastic and increase the probability of ADA crashing to $0.25.
Bulls can stop the decline in Cardano price at $0.35. Besides, a daily bullish candle continues to form, which could clear the path for a potential falling wedge pattern breakout.
The falling wedge in the daily time frame formed after ADA pulled back from the yearly peak of $0.81, touching two lower highs and three lower lows. Traders anticipate a major price increase above the upper trend line for a 61% move. This target is determined by measuring the distance between the first swing low and the first swing high and later appending it to the breakout point. It will bring ADA closer to taking down resistance at $0.75.
The post Cardano Price Crash Could Sweep $0.25 After 48% Drop In New Addresses appeared first on CoinGape.
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