CandleFocus

Why is Cardano Down This Week? Key Insights and Analysis

Author: Content Editor
The cryptocurrency market is currently experiencing a correctional phase, with over $335.91 million in liquidations in the past 24 hours. Long positions have been hit hardest, accounting for $225.52 million of the total liquidations. The market valuation of the industry has dropped below $3.3 trillion, erasing earlier gains and raising doubts about a short-term recovery.

Cardano (ADA) has been heavily impacted by the market downturn, with an 8% decrease in the past week and trading at $0.9667. The cryptocurrency has been steadily declining and facing vulnerabilities within the broader crypto ecosystem. Optimism was briefly seen when ADA was trading near the $1 mark, but sellers regained dominance and pushed the price below $1. The daily MACD and RSI indicators suggest further downward pressure and more declines if bearish sentiment continues.

All eyes are on the $0.91 support level, which is a critical threshold for ADA. Breaking below this level could lead to a deeper correction with $0.76 as the next line of defense. The broader trend also shows bearish control, with diminishing buyer interest since December. User activity on the Cardano blockchain has decreased, with daily active addresses and transactions both declining. Additionally, Cardano's total value locked (TVL) has dropped by over 28.76%, with a significant decline occurring between January 7 and January 9.

Overall, the market correction is impacting Cardano as it struggles to resist bearish sentiment and faces mounting vulnerabilities. The future recovery of ADA remains uncertain, with the possibility of further declines if bullish momentum does not return.

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