NOIDA (CoinChapter.com)— Cardano’s price continues to face downward pressure despite the anticipation of the upcoming Chang hard fork, an upgrade that promises to decentralize the network further.
ADA has struggled to gain upward momentum, with prices languishing in recent weeks. The latest data shows that 72% of network nodes, primarily stake pool operators (SPOs), have signaled their readiness for the Chang hard fork by installing the necessary Cardano Node 9.1.0 software.
However, this milestone has done little to bolster ADA’s market performance, as investor sentiment remains subdued. The slow preparation by some nodes and exchanges, combined with broader market conditions, might be contributing to the current price struggles.
MVRV Data and Large Holder Behavior Signal Continued Bearish Outlook
Cardano’s recent price action reflects a market grappling with uncertainty. The current MVRV Z-Score, deeply in negative territory, highlights the underlying bearish sentiment.
Investors who bought at higher levels are now underwater, making them less inclined to sell, which has resulted in a lack of momentum for ADA. Despite the potential for accumulation, the market remains hesitant.
This hesitation is particularly evident among large holders whose distribution patterns indicate a cautious approach. The distribution phase among the largest ADA holders has stalled, signaling a lack of confidence in a short-term recovery.
The recent uptick in accumulation by mid-sized holders, specifically those with wallets holding between 100,000 and 1 million ADA, offers some hope for stabilization.
However, this accumulation is insufficient to offset the broader market’s reluctance, especially given that whale holders, those with 1 million to 10 million ADA, have shown little interest in increasing their positions.
This imbalance between mid-sized and whale holders suggests that while some investors see value at current levels, the lack of strong buying interest from larger entities continues to weigh on ADA’s price prospects.
The upcoming Chang hard fork could be a critical step forward for Cardano. However, it appears to be contributing to the uncertainty rather than alleviating it.
Bearish Setup Could Derail Cardano’s Uptrend Hopes
Meanwhile, the ADA USD pair has formed a bearish technical setup called the ‘descending triangle.‘
Analysts identify the descending triangle as a classic bearish continuation pattern. The pattern consists of a descending upper trendline compressing price action into progressively lower highs and a flat lower trendline providing support.
Moreover, the pattern indicates mounting selling pressure, where each rally becomes increasingly feeble, struggling to overcome resistance. Traders often gauge the potential downside by measuring the maximum height of the triangle.
Recently, the ADA/USD pair tested the support line of this descending triangle, with bulls pushing the price back into the pattern. However, should ADA confirm this bearish setup, the pair could see a sharp decline of over 34%, targeting levels around $0.22.
In the current market climate, a breakdown below this pattern could spell disaster for ADA, potentially triggering significant losses.
If ADA fails to rally, bulls may attempt to consolidate above the pattern’s support. However, the broader market sentiment suggests a challenging path ahead, making any sustained rally unlikely.
