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Cardano (ADA) is in a downtrend as it loses some of its recent price gains. Despite the price drop, the network is seeing a surge in transaction volume. The network has an enviable reputation as a developer hub, with several interesting projects launched on its network.
However, it still depends on general economic factors affecting cryptocurrencies such as the consumer price index (CPI).
Cryptocurrency Analyst Analyzes ADA Performance
Cryptocurrency analyst Elite XBT on Twitter noted that Cardano transaction volume has increased since the beginning of 2023. However, he stated that market volatility has put significant pressure on the price.
According to the chart, transaction volume fell below 10 billion ADA in January 2023. However, it climbed above 20 billion ADA and may have recovered its 50 billion ADA to its all-time high (ATH) last year.
According to another analyst, the increase in transaction volume is a consequence of the increase in the activity of whales and institutional holders. He believes that the increase in volume is bullish and supports the ADA’s transition to an uptrend.
Also, Input Output Global (IOG), which is responsible for the research and development of Cardano, shared its weekly development report. The report showed that the Cardano network processed 65.4 million transactions in the last week.
It is noteworthy that in March 2023, the number of wallets in the Cardano network exceeded 4 million. This indicates the continued growth potential of the Cardano network as more investors sign up.
Twitter user Alexander Legolas also believes the current trend will turn from bearish to bullish as protocols and updates become more attractive to users.
What’s next for ADA?
Today, ADA is still trading in the red, forming the second consecutive red candle on the daily chart. The bears are back to lower the price for the last two days. Its relative strength index (RSI) is 51.24 in the neutral zone. It is noteworthy that the indicator is moving down due to bearish pressure.
The convergence/divergence of the moving averages (MACD) ADA fell below the signal line, which indicates a bearish mood. However, despite the price drop, ADA remains above its 50-day and 200-day simple moving averages (SMAs). This means that its short-term and long-term outlook remains bullish and the decline could be a brief correction for consolidation.
ADA Tanks on the Daily Chart of l ADAUSDT on Tradingview.com
Support at $0.3512 will prove critical to prevent further declines and could serve as a price reversal to resume the uptrend. However, ADA needs to overcome the resistance at $0.4186 to continue the uptrend.
ADA is likely to resume the uptrend in the coming days thanks to positive activity and an increase in transactions on its network that are fueling the rally.
Featured image from Pixabay and chart from TradingView