Cardano’s native token ADA has declined over 7% this week and is down sharply from its all-time high. However, analysts note the asset is testing a historically significant support level near $0.25, from which it has previously rallied substantially. On-chain data also shows active wallets are deeply in the red, a condition some interpret as a potential bullish signal.
Cardano’s native token has been among the poorest performers in the past year. Data suggests ADA active wallets are down over 40% on their investments within this timeframe.
Popular analyst Ali Martinez highlighted that ADA is currently testing the key support level at $0.25. The asset has defended this level on multiple occasions in the past month.
Martinez’s data shows the last two times Cardano’s token successfully bounced from this support led to significant gains. It rocketed by 85% in early 2023 and by 200% from October 2023 to March 2024.
Before this, the TD Sequential printed a buy signal on ADA’s weekly chart. This followed a 40% drop from its mid-January peak of $0.44 to its current price near $0.26.
The token remains more than 90% away from its all-time high of over $3.00 set in September 2021. On-chain data from Santiment indicates Cardano investors have remained deep in the red.
Citing this data, a report noted active wallets were down 43% over the past year. This negative MVRV value is typically regarded by some as a bullish indicator.
“In a zero-sum game, when average returns are severely negative, this is an indication of a looming turnaround,” Santiment’s analysts explained. They stated this condition can intrigue key stakeholders and professional traders due to lowered risk.
