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Cardano’s price fell nearly 4% over the past day and sits down 33% for the month. But signs point to easing sell-off momentum across the network.
The share of ADA supply sitting in profit crashed about 75% since January, dropping from above 33% in mid-January to roughly 8% in early February. With fewer holders making money on their positions, the rush to dump coins during small rallies pretty much disappeared. Profit-taking incentives basically vanished. Coin movement data backs up the trend – during February 6’s sell-off, activity spiked to around 168 million ADA but has since dropped to roughly 92 million, a 45% reduction. Long-term holders aren’t in a hurry to sell anymore and decided to wait instead.
Charts show promise too.
On the 4-hour timeframe, Cardano forms an inverse head-and-shoulders pattern with a left shoulder, deeper central low, and higher right shoulder. The neckline slopes downward, making breakouts tougher since buyers must push through falling resistance. A clean four-hour close above the $0.275 to $0.280 range would activate the pattern. Between January 31 and February 9, while ADA’s price hit lower lows, the Relative Strength Index showed higher lows – a bullish divergence that suggests weakening selling pressure.
Confirmation could come with a new price candle above $0.259.
Charles Hoskinson, Cardano’s creator, stays upbeat about the platform’s long-term prospects despite recent price struggles. Hoskinson points to ongoing development work and improvements within the Cardano ecosystem. He talks up the recent rollout of smart contract capabilities as a big step in boosting Cardano’s utility and appeal to developers. On February 7, Cardano’s development team announced a new update aimed at enhancing network scalability that’s expected to increase transaction throughput. By improving network efficiency, Cardano wants to strengthen its competitive edge against rivals like Ethereum and Solana.
Data from CoinGecko shows Cardano’s market cap sits at approximately $9 billion as of February 9. More on this topic: Senate Banking Panel Postpones Crypto Hearing.
ADA ranks as the seventh-largest cryptocurrency by market cap. The recent price swings haven’t really changed its standing among top digital assets, which reflects strong foundational support among investors holding for the long haul. Investors are watching closely for any announcements from Input Output Global (IOG), the company behind Cardano, regarding future partnerships or tech advances. Such developments could spark renewed investor interest and potentially drive trading volume higher, influencing ADA’s price trajectory in coming weeks. On February 8, the Cardano Foundation released a report detailing recent ecosystem expansions and collaborations with several blockchain projects focused on sustainability and decentralized finance.
These partnerships aim to leverage Cardano’s proof-of-stake protocol for reducing carbon footprints, potentially increasing ADA’s appeal to environmentally conscious investors.
Buyer strength remains the next critical factor though. On-Balance Volume (OBV), which measures whether volume supports price trends, stays on a downward path. The recent price rebounds lack sustained demand. The last significant buying surge happened on February 6, when ADA jumped from near $0.220 to around $0.285 – a near 30% increase with volume spiking sharply. Since then, participation cooled off. A real breakout would need renewed volume and a push through OBV’s downtrend. Without that, rallies will probably fizzle out.
Key resistance sits near $0.275. A confirmed break here could validate the inverse pattern, with $0.285 as the next obstacle. Clearing that level could pave the way toward $0.346, about 30% from the pattern’s neckline.
Trading activity shows mixed signals. Binance, one of the world’s largest cryptocurrency exchanges, reported a noticeable uptick in ADA trading volume on February 9. The increase comes amid growing speculation about Cardano’s potential price movements. Analysts think if trading volumes keep rising, it could signal renewed interest among both retail and institutional investors. Meanwhile, ADA’s performance gets watched closely by Grayscale Investments, which included Cardano in its Digital Large Cap Fund. As of its latest quarterly update, Grayscale noted that Cardano’s inclusion reflects its strategic position among top cryptocurrencies. See also: Fidelity Drops Digital Dollar Token as.
On the downside, $0.259 is crucial support.
A drop below that level could undermine the bullish setup. Full pattern invalidation would occur below $0.220, putting the price back under the pattern’s base. With selling incentives down 75% and coin activity quieted, momentum shows signs of improvement. But volume hasn’t asserted buyer control yet. If strong participation returns and $0.275 breaks, a move toward $0.34 becomes possible. If not, Cardano risks drifting lower.
February 10 marks the upcoming release of Cardano’s monthly development update. Investors and developers are eager to gain insights into ongoing projects and future upgrades covering advancements in smart contract functionality and potential enhancements to Cardano’s interoperability with other blockchain networks.
The development update will likely address Cardano’s progress on Hydra, its layer-2 scaling solution designed to process up to one million transactions per second. Early testing phases showed promising results, with the protocol handling thousands of transactions with minimal fees. Several decentralized applications have expressed interest in migrating to Hydra once it reaches full deployment.
Institutional adoption metrics reveal mixed signals for Cardano’s broader acceptance. While three major pension funds added ADA to their portfolios in January, two cryptocurrency hedge funds reduced their positions by roughly 15% during the same period. Messari data indicates that Cardano’s total value locked in DeFi protocols dropped from $320 million in December to $280 million by early February, reflecting broader market uncertainty rather than platform-specific issues.
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