Cardano’s (ADA) price has taken another dip over the last 24 hours, approaching a historical low that could signal a potential bottom. This decline follows the much-anticipated Chang hard fork, which occurred just three days ago, setting off a series of market reactions.
Chang Hard Fork – The “Sell the News” Effect
The Chang hard fork, which was implemented on September 1, has been met with mixed reactions. According to a BeInCrypto report, the upgrade turned into a “sell the news” event as major crypto whales seized the opportunity to offload substantial amounts of ADA. This move contributed to the recent drop in ADA’s price, which now stands at $0.31—a decline of nearly 10% since the upgrade.
Charles Hoskinson, Cardano’s founder, has since provided insights into the blockchain’s next steps. In a recent YouTube video, Hoskinson announced that a follow-up development, dubbed “Chang+1,” is set to roll out within the next 90 days. This new upgrade aims to address current issues and bring fresh innovations to the Cardano ecosystem.
MVRV Ratio and Historical Context
Amidst this price fluctuation, on-chain data from Santiment reveals that ADA’s Market Value to Realized Value (MVRV) ratio has dropped further into negative territory. The 30-day MVRV ratio is now at -22.86%, and the seven-day ratio stands at -9.80%. These figures suggest that the cryptocurrency is experiencing low profitability, a potential sign of price bottoming.
Historically, Cardano’s native token tends to hit its lowest points when the 30-day MVRV ratio is between -16% and -27%. With the current ratio aligning closely with this range, there is a possibility that ADA could be nearing its bottom, presenting a potential rebound opportunity for investors.
Technical Indicators and Price Predictions
Technical analysis of ADA’s daily chart reveals a bullish pattern known as a falling wedge. This pattern typically indicates a potential trend reversal. The falling wedge is characterized by two descending trendlines representing highs and lows, signaling that a breakout could occur if buyers step in and sellers retreat.
Additionally, the Relative Strength Index (RSI), a momentum indicator, supports the possibility of a rebound. ADA’s current RSI is at 29.76, indicating oversold conditions and suggesting a possible price correction. If buying pressure increases at this level, ADA could potentially rise to $0.35.
However, it’s essential to consider the broader market conditions. If Bitcoin’s price continues to exert downward pressure on the market, ADA might face further declines, potentially reaching $0.30.
As Cardano’s ADA approaches a crucial support level, the combination of technical patterns and historical MVRV ratios suggest that a potential rebound could be on the horizon. With upcoming upgrades and market dynamics at play, ADA’s next moves will be closely watched by investors and analysts alike.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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