Cardano’s Path: Long-Term Holders Dictate ADA’s Future Amid Circulation Trends

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  • Cardano (ADA) long-term holders could dictate the future of the token by keeping their tokens out of circulation, artificially controlling supply and demand.
  • Technical indicators point to a bullish outlook, suggesting a bullish trend for the midterm to the long term.

Technical analysis has shown that long-term investors hold the fate of Cardano (ADA) with their decisions easily influencing price movement. In recent weeks, ADA has established strong support at the $0.45 level with subsequent rebounds proving that this is a great buying point.

At the time of writing, ADA is exchanging for $0.4622 after a 4.5% dip in the last 24 hours. This extends its weekly losses by 24% as the wider market undergoes a bearish trend. In the past 7 days, ADA has been trading within the $0.4175 – $0.6219 price range. With prices revisiting their recent lows, smart investors will be looking to take advantage of the discount prices to keep accumulating.

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On-chain data shows that long-term investors will have a great influence on the bullish or bearish trend taken by the altcoin. Confirming its bullish outlook is a jump in Cardano’s network activity. The Mean Dollar Invested Age (MDIA) for the past 90 days reached 269 on April 15th as revealed by data from Santiment. A lower MDIA typically indicates more activity on the network.

Furthermore, as CNF highlighted earlier, analyst Ali Martinez has identified a striking similarity between ADA’s current price pattern and its behavior from 2018 to 2021. Martinez highlights a fractal pattern in ADA’s price movement, indicating a potential surge of up to 2000% if historical trends repeat themselves. According to Martinez, ADA is consolidating and preparing for an upward movement, drawing parallels with its previous cycle. If the altcoin follows this trajectory, it will easily revisit and establish a new all-time high.

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Cardano (ADA) Bulls Face Short-term Resistance

However, it is evident that bulls have found it hard to break the 0.50 resistance which could prove crucial to maintain bullish momentum for the long term.

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But investors still have reason to be concerned about the short-term outlook. The Relative Strength Index (RSI) shows that buying momentum is still slow, leading to little expectation of a price rebound in the short term.

The  Mean Coin Age (MCA) also reflects network activity but with a twist. A low MCA suggests new coins are being bought and held (possibly in cold storage). Conversely, a rising MCA indicates existing coins are entering circulation. Interestingly, Cardano’s price has often trended downwards when the MCA increases.

Additionally, the Elder Force Index (EFI) has plateaued, which suggests ADA might be consolidating its recent gains. An increase in the EFI could signal a potential breakout for the token’s price. However, if the EFI falls, it could indicate a price decline.

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