Cardano (ADA) Price Reclaiming $0.40 Would Save $3 Billion Worth of Profits

By admin On Aug 2, 2024

Cardano’s (ADA) price has largely noted whiplash since the early June crash. While there have been moments of recovery, the general trend has been bearish.

To make this worse, nearly $3.3 billion worth of profits are on the line, but ADA investors’ optimism could save them.

Cardano Investors Hope for Recovery

Cardano’s price is exhibiting signs of further drawdown, with the altcoin already noting a 2.2% decline today. The concern here is much larger than before, as billions of dollars worth of ADA could lose its profitability.

According to the Global In/Out of the Money (GIOM) indicator, earlier this week, 3.7 billion ADA worth about $1.4 billion turned loss-bearing. This supply was bought between $0.39 and $0.41, which ADA fell through after losing the support of $0.40.

Now another 5 billion ADA worth $1.9 billion is on the verge of witnessing a similar fate. This supply was bought at $0.36 and $0.39. Trading at $0.38, Cardano’s price is very close to losing the support of $0.36.

Cardano GIOM. Source: IntoTheBlock

If this were to happen, about $3.3 billion worth of losses would emerge in just two weeks, turning the investors bearish.

For now, they are holding off on selling to offset their losses. Observing the active addresses by profitability shows us that less than 3% of all active addresses are in profit at the moment. Their presence dominating the participation beyond 25% is a bearish sign.

Cardano Active Addresses by Profitability. Source: IntoTheBlock

This is because they tend to sell more frequently, which is detrimental to Cardano’s price. Thus, their resilience could prevent further drawdown and help ADA recover.

ADA Price Prediction: Bouncing Back

Cardano’s price dropped by more than 14% in the last 11 days and is currently trading at $0.38. The next critical support for ADA is at $0.37, which has already been tested in the past.

If investors’ conviction rubs off on the price as well, ADA could see a bounce back. The recovery target is reclaiming the support of $0.40. This would push the altcoin further upwards, aiding Cardano in recovering its losses.

Cardano Price Analysis. Source: TradingView

But if the support at $0.37 is lost, the altcoin will end up dropping to $0.34. No drawdown is expected, but even so, ADA investors could face it, invalidating the bullish thesis.

Source

0 43

Share FacebookTwitterGoogle+ReddItWhatsAppPinterestEmail