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Cardano broke above $0.40 but quickly retraced 22% in the last two weeks. Social sentiment and recent buying patterns of crypto whales suggest that investors may be positioning for the next rally.
Cardano Flashes Bullish Signals
On February 16, Cardano crossed $0.41, in a bullish move that sent its year-to-date performance above 67%. However, by March 7, it had retraced 22% toward $0.32, which sent the social sentiment among network participants into a downward spiral.
Blockchain analytics firm, Santiment, has reported that the mentions of Cardano across mainstream crypto media channels have dwindled significantly in the last 30 days.
The chart below depicts how Cardano’s social dominance declined from 1.4% on February 10 to 0.69% on March 8.
Social dominance monitors the share of Cardano mentions across prominent social media channels. Typically, a decline in social dominance indicates that most market participants are currently pessimistic, which could spur crypto investors looking to buy the dip.
Another on-chain metric that indicates a potential bullish ADA price action is the recent surge in Development Activity on the Cardano network. It has increased by nearly 40% since February 1.
The on-chain metric monitors code improvements and other core technical activities on a project’s public repository. A spike in development activity suggests a potential new wave of demand due to impending product improvement, bug fixes, or new features on the network.
ADA Price Prediction: When to Buy the Dip?
The 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 nearly 16% losses. Many crypto investors may now be unwilling to book such significant losses.
Looking at the historical patterns, ADA looks on course to rise 20% toward $0.37 before holders begin to book profits again. After this, it could enter an extended rally toward the next significant profit-taking zone at $0.42.
Still, if the $0.25 support doesn’t hold, there’s a possibility that Cardano may decline toward the 35% loss line at $0.20.
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