Cardano (ADA) Price Escapes Danger Zone as Investors Demand Recovery

Cardano’s (ADA) price is failing in its attempts to note recovery largely due to the broader market cues.

This is because ADA investors are demanding a price rise, saving the altcoin from selling.

Cardano Investors Saved From Bearish Pressure

Cardano’s price has declined over the last 24 hours after failing to breach the resistance at $0.40. The reason behind this is slight selling observed after the third-generation crypto asset entered the danger zone of the Market Value to Realized Value (MVRV) ratio.

The MVRV ratio assesses investor profit and loss. Currently, Cardano’s 30-day MVRV stands at 5.4%, but 48 hours ago, it was at 11.4%, indicating profitability and possible selling pressure.

Historically, ADA tends to correct when the MVRV is between 8% and 18%, often called the danger zone. The same thing happened two days ago, which led to a correction in Cardano’s price.

Cardano MVRV Ratio. Source: Santiment

However, the altcoin deflected heavy selling pressure thanks to positive investor demand. Cardano’s positive funding rate indicates investors are warranting a price increase. This metric reflects traders’ willingness to pay a premium in the derivatives market.

Since the long contracts are dominating the short contracts, it signals optimism regarding the cryptocurrency’s future performance. 

Cardano Funding Rate. Source: Coinglass ADA Price Prediction: Drop and Bounce Back

Cardano’s price has been following the same pattern since late February. This macro downtrend leads to ADA noting a decline followed by a sharp recovery and then observing a decline.

This pattern suggests that ADA’s failed breach of $0.40 will result in a drop to the support floor of $0.34 from the trading price of $0.37. The altcoin has already lost the support of $0.37, making its drop to the support floor likely.

Cardano Price Analysis. Source: TradingView

However, if the investors’ demand overpowers the macro bearishness, ADA could recover. Breaching $0.40 will open up the altcoin to a run up to $0.44, beyond which the bearish thesis will be invalidated.

The post Cardano (ADA) Price Escapes Danger Zone as Investors Demand Recovery appeared first on BeInCrypto.