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Cardano (ADA) is currently at a crossroads as its price hovers around $0.33, nearing one-year lows.

Over the past month, ADA has seen a notable decline of 16.5%, with the market sentiment becoming increasingly bearish.

On-chain metrics point to a bearish sentiment for Cardano

On-chain metrics paint a grim picture, with daily active addresses in loss skyrocketing from 1,680 to nearly 12,000 in just a week.

Recent IntoTheBlock data reveals that a staggering 79% of ADA holders are recording losses, as only 17% of holders remain in profit.

This situation is exacerbated by a steep 89% drop from its all-time high of $3.10 recorded in September 2021.

Scheduled ADA token unlocks are adding to the downward pressure; for instance, 18.53 million ADA tokens, worth approximately $6.15 million, were released on October 27, with another identical amount expected on November 1.

These unlocks, while relatively minor compared to Cardano’s total market cap of $11.8 billion, contribute to an already tense market environment.

The bearish sentiment is further underscored by a prominent analyst’s assessment suggesting a potential crash of up to 30%, with a target price of $0.23.

Despite a slight recent uptick of 0.4%, ADA remains down 8.9% for the week, accompanied by a 14% drop in trading volume, signalling waning market activity.

The overall analysis remains bearish, though there is a glimmer of hope as ADA attempts to stabilize within a three-month trading range.

The possibility of ADA turning bullish

While Cardano faces a turbulent market characterized by significant losses and bearish sentiment, the ongoing developments and rising TVL signal a more optimistic future.

Cardano’s Total Value Locked (TVL) is nearing new highs according to DeFilLama data, which offers a positive counterpoint to its current price struggles.

The network’s TVL has been steadily increasing, attributed to the rising use of DeFi protocols and ongoing improvements aimed at enhancing throughput and reducing transaction costs.

In the past 24 hours, ADA has managed to rise by over 2%, currently trading at $0.3373, indicating that some investors still hold a degree of confidence in its future.

Technical analysis shows signs of potential reversal, with trading volume increasing by more than 61% in the last day.

This uptick in volume indicates growing interest among both retail and institutional investors.

Analysts believe that continued enhancements to the Cardano network, particularly in scalability and interoperability, will attract more developers and users, potentially propelling ADA’s price higher in the long run.

The balance between these factors will determine ADA’s trajectory in the coming weeks, as investors remain watchful for indicators of market recovery.

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