Cardano’s ADA is going through the motions once again as the bears continue to dominate the crypto market. The Cryptocurrency managed to slide to its lowest year-to-date levels this week. More downside might be on the way according to Cardano head, Charles Hoskinson.
The Cardano founder and IOHK CEO acknowledged that the crypto market conditions have been tough for the last few months. He also stated that the short-term environment will be rough but held up an optimistic long-term outlook. This is based on strong fundamentals for some of the top crypto networks and companies.
ICYMI, find out what @IOHK_Charles had to say when he appeared on @MorningsMaria this morning 👇https://t.co/TpftrhpIr6
— Input Output Media (@IOHKMedia) October 11, 2022
Cardano is among the crypto networks that have demonstrated strong fundamentals and healthy growth in terms of adoption. Unfortunately, market conditions have led to a different narrative for Cardano’s native cryptocurrency ADA.
The latter was down by roughly 35% from its August peak at the press time, courtesy of the extended bearish performance this week.
ADA bears launch strong assault
ADA managed to achieve a new 2022 low at $0.382 during Tuesday’s (11 October) trading session. This makes it one of the few top cryptocurrencies to achieve a new 2022 low this week. This performance occurred after breaking below its short-term wedge pattern.
ADA’s bearish performance managed to push below the RSI’s oversold zone albeit briefly. The bears have experienced some friction since then, indicating that traders are buying the dip.
However, there are signs that demand has not yet recovered to a sustainable level. This might be due to the expectations of more downside considering the harsh short-term conditions as Hoskinson noted.
One of the signs of a slow recovery is that ADA volumes are still in the lower 4-week range. Its volume dropped substantially in the last few days but we did observe a slight uptick at the start of the week.
This may have been incoming selling volume and this is likely the case considering that the same metric dropped slightly in the last 24 hours.
Furthermore, ADA volume dropped from above 726 million coins to as low as 448 million coins in the last 24 hours, at press time. This reflects the tapering out of sell pressure. Meanwhile, buying pressure was yet to achieve a notable recovery.
ADA’s active addresses have been on a consistent decline since the last week of September. There was no notable increase in active addresses at the time of writing.
The fact that active addresses are still low is evidence that investors still think that the market may drop further.
Well, ADA hovered right above the oversold zone at press time and could still drop deeper if the selling pressure continues.
The probability of such an outcome is still quite high considering the external economic hammering down on risk-on assets.
On the other hand, ADA’s current discount proposition is attractive and might encourage enough pressure to cancel out the bearish pressure.