Is it the optimal time to buy Cardano (ADA) after the decline?
Cardano broke above $0.40 but quickly retreated 22% in the last two weeks. Social sentiment and recent buying patterns for crypto whales suggest that investors may be positioning themselves for the next rally.
Cardano is flashing bullish signals
On February 16, Cardano passed $0.41, in a bullish move that sent its year-to-date performance over 67%. By March 7, however, it had retreated 22% to $0.32, sending social sentiment among network participants into a downward spiral.
Blockchain research firm Santiment has reported that mentions of Cardano across mainstream crypto media channels have decreased significantly over the past 30 days.
The chart below shows how Cardano’s social dominance dropped from 1.4% on February 10th to 0.69% on March 8th.
Social dominance monitors the share of Cardano mentions across prominent social media channels. Usually, a decline in social dominance indicates that most market participants are currently pessimistic, which can spur crypto investors looking to buy the dip.
Another on-chain metric that indicates potential bullish ADA price action is the recent increase in development activity on the Cardano network. It has increased by almost 40% since February 1st.
The on-chain metric monitors code improvements and other core technical activities on a project’s public repository. An increase in development activity suggests a potential new wave of demand due to impending product improvements, bug fixes, or new features on the network.
ADA Price Prediction: When to Buy the Dip?
Market value-to-realized value provides relevant data for upcoming price actions. As shown below, most holders who bought ADA in the last 30 days are sitting on almost 16% losses. Many crypto investors may now be reluctant to book such significant losses.
Looking at the historical patterns, ADA looks set to rise 20% towards $0.37 before holders start booking profits again. After this, it could enter an extended rally towards the next significant profit zone at $0.42.
Still, if the $0.25 support does not hold, there is a possibility that Cardano could decline towards the 35% loss line at $0.20.
Disclaimer
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