ADA Faces Heavy Pressure, But Cardano's On-Chain Data Tells Another Story

The Cardano network has experienced a significant uptick in both network activity and online discussions, even as its native token ADA has dropped to price levels not observed since December 2020. According to data from Santiment, daily active addresses and social dominance have surged for the second time this month, making Cardano one of the most talked-about assets in the crypto market.

Data revealed that the number of active addresses on the Cardano network climbed to 29,025, while Cardano accounted for 0.33% of all cryptocurrency-related discussions. Santiment noted that this rise in activity comes amid heavy price pressure and increased volatility for ADA. The growing bearish sentiment has been linked to recent comments from Cardano founder Charles Hoskinson, who warned that more Cardano projects could fail. His decision to reduce public involvement and ongoing disagreements within the community over treasury funding have also added to concerns.

Despite weak sentiment, Santiment pointed out that historical spikes in network activity combined with growing market concerns have often preceded mild ADA rebounds. Two instances were highlighted: in late March to early April, when active addresses climbed to around 22,000 and social dominance rose above 0.40%; and in early June, when active addresses reached roughly 32,500 and social dominance peaked near 0.38%. In both cases, these spikes were followed by a modest recovery in ADA’s price.

At the time of writing, ADA is trading at $0.14, having declined more than 3% over the past 24 hours. The daily chart has generated a TD Sequential buy signal, which typically indicates a potential short-term price rebound. However, crypto analyst Ali Martinez warned that traders should remain cautious. The warning follows a security breach involving a Cardano-based wallet protocol that led to the theft of nearly 129 million ADA, worth approximately $20 million.

Martinez stated that any near-term recovery could turn into a bull trap, attracting buyers before the price resumes its decline. He noted that any relief rally is likely to face resistance between $0.160 and $0.176. If ADA fails to break above this range, the price could move lower and establish new lows.

Source: https://cryptopotato.com/ada-faces-heavy-pressure-but-cardanos-on-chain-data-tells-another-story/