Cardano (ADA) Approaches One-Year Low Amidst Growing Selling Pressure

Cardano's (ADA) price decline and recent on-chain data suggest potential selling pressure as more ADA holders face losses.

Cardano’s Price Plunge Nears One-Year Low

Cardano (ADA) has faced a steady downward trend since March, reaching critical support levels as it approaches its one-year low. After peaking at $0.807 on March 12, ADA has dropped significantly, losing approximately 15% over the past month and now trading at $0.33 with a market cap of $11.8 billion. The trading volume has risen by 5%, hovering at around $185 million, indicating increased activity as investors reassess their positions.

Data from IntoTheBlock highlights the challenging landscape for ADA holders. Daily active addresses (DAA) in loss surged from 1,680 to 11,960 within the past week alone. A sharp increase in DAA in loss typically signals potential panic among investors, many of whom may consider selling to minimize further losses. This activity could heighten selling pressure, amplifying Cardano’s ongoing decline.

Market Sentiment: U.S. Election and Bearish Indicators

ADA's downward trajectory could continue amid broader market uncertainty surrounding the upcoming U.S. presidential elections. IntoTheBlock data shows only 17% of Cardano holders are currently in profit, while 3.6% are breaking even, and the majority are at a loss. With ADA 89% below its all-time high of $3.10 (set on September 2, 2021), sentiment remains bearish.

Recent ADA token unlocks increase the circulating supply by adding to the pressure. Tokenomist reported that on October 27, 18.53 million ADA tokens, valued at $6.15 million, were introduced to the market, with another release of the same amount scheduled for November 1. Currently, approximately 34.99 billion ADA tokens from a maximum supply of 45 billion are in circulation, and these periodic unlocks contribute to the growing supply-side pressure.

Conclusion

On a positive note, Cardano’s recent integration of BitcoinOS’ Grail Bridge opens up cross-network transactions for Bitcoin holders, offering a decentralized option with zero-knowledge mechanisms for secure transactions without intermediaries. This strategic move allows ADA to tap into Bitcoin’s $1.3 trillion liquidity, potentially enhancing its utility and appeal among investors.