Cardano Traders Eye Potential Recovery After Recent Price Decline

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• Cardano’s price dropped by nearly 21% over the last 30 days, sparking interest among traders for recovery.
• Buy orders exceed sell orders for ADA at $0.37, suggesting a potential stabilization and increase to $0.40.

Cardano (ADA), a prominent cryptocurrency, experienced a notable decline in its market value, dropping by nearly 21% over the last 30 days. Despite this downturn, data and market indicators suggest a possible recovery in the near term as traders capitalize on the lower prices.

Analysis of the Exchange – Onchain Market Depth metric, which reflects the current buying and selling orders on exchanges, reveals an interesting trend. The bid side of this metric, which tracks the demand for ADA tokens, shows that buyers are prepared to purchase approximately 166.73 million ADA at an average price of $0.37 each.

Conversely, on the ask side, sellers are ready to offload about 121.95 million ADA at the same price level.

Given this imbalance where buy orders surpass sell orders, there is an underlying strength in ADA’s price at $0.37. This robust buying interest could stabilize the token’s price and possibly drive it to increase to around $0.40 in the coming days.

Further insights from the Market Value to Realized Value (MVRV) ratio, an on-chain metric used to assess whether a cryptocurrency is under or overvalued compared to its fair value, also support the potential for price appreciation. 

Currently, Cardano’s 30-day MVRV ratio stands at 13.33%, indicating that, on average, selling now would result in a 13.33% loss compared to the purchase price. Historically, ADA prices have rebounded when the MVRV ratio falls within the -11% to -27% range, suggesting a looming price recovery.

As markets continue to evolve, the potential for an upward price correction remains, although it is important for traders to remain cautious. The possibility of a further price drop cannot be dismissed, but the severity of any potential downturn may be mitigated by the current market conditions.

While the recent performance of Cardano has been challenging, the accumulation of buy orders, coupled with supportive on-chain metrics, points to a potential uplift in ADA’s price. 

Cardano (ADA) has recently shown a slight positive trend, with a 24-hour price increase of 1.56%, reaching approximately $0.3912. The weekly performance is also positive, showing a 12.06% increase.

Technically, ADA is trading within an ascending parallel channel on the 4-hour chart and may challenge the $0.3979 resistance level if it maintains support above the 9 and 20 EMA lines. However, significant sell volume and potential retracement risks suggest caution, with support zones between $0.3712 and $0.3820 being critical levels to watch​