ADA prices retreat towards the dollar, putting more holders in the red as gains erode.
As Cardano (ADA) prices fall back towards the psychological $1 level, more and more investors are finding themselves with unrealized losses holding onto the digital asset.
Cardano’s ADA token had a bearish week. The price has fallen 11.4% since Monday, putting more holders in the red. More importantly, ADA is now 64.7% below its all-time high of $3.09 from September 2 and is likely to fall below one dollar over the next few days if the trend continues.
According to IntoTheBlock’s “in/out of the money” indicator, more than two-thirds, or 67%, of ADA holders are underwater. A quarter of Cardano investors are in the green, and 9% of them are in balance.
The indicator identifies the average cost at which tokens were purchased and compares it to the current price, which was $1.09 at the time of writing.
The analytics provider said 3.41 million ADA addresses are in the red compared to just 1.25 million in the green.
In/Out of Money: IntoTheBlock
A related metric is the length of time the token has been held. The vast majority, 76% of ADA holders, have held it between one and 12 months. Only 11% of Cardano investors have held the token for more than a year, and these are the ones that are still in profit.
From a technical standpoint, ADA has turned bearish and could fairly quickly revisit its 2022 and yearly low of around $0.80, which occurred in mid-March. This would push even more investors into the red unless they sell at a loss.
The price drop could be related to the network failing to meet high expectations around the launch of smart contracts. In terms of the number of decentralized applications (DApps), Cardano is still something of a wasteland with DeFi Llama reporting that there are only ten DeFi protocols running on the network with a combined total value locked in. approximately $233 million.
Cardano co-founder Charles Hoskinson, however, believes that many Cardano dApps are waiting for Vasil’s hard fork to launch in June. The “Basho” phase of Cardano’s upgrade roadmap will focus on scalability and smart contracts with a new technology called Hydra to further increase network throughput.
In terms of other fundamentals, Cardano looks relatively solid. Network demand hit record capacity earlier this year when the much-hyped decentralized exchange SundaeSwap launched.
Santiment reported that Cardano was the most developed cryptocurrency project on GitHub in 2021, and Cardano NFT bonds were unveiled this week, providing another investment vehicle on the network.
However, unless there is a significant turnaround in trade sentiment, ADA selling could start to gain momentum, putting more holders deeper under water.
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67% of Cardano holders underwater and most bought less than a year ago | Cryptocurrency
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