Cardano holders realize nearly $20 million in losses as ADA price bleeds

• Cardano holders realized $20.09 million in losses on Tuesday, on-chain data shows. 
• ADA price fell to $0.58 for the first time since mid-February. 
• Over 60% of Cardano holders are sitting on unrealized gains, profit-taking could push ADA price further down.

Cardano (ADA) price dipped to $0.56 on Wednesday, offering sidelined buyers the opportunity to buy the token nearly 30% below its year-to-date peak of $0.8104. The decline followed a marketwide correction and mass liquidations in Bitcoin after its price dropped to $62,000. 

Cardano’s holders realized large volumes of losses on Tuesday, on-chain data shows. If holders continue to shed their ADA holdings, the Ethereum-alternative token could crumble under selling pressure. 

Also read: Cardano price ranges below $0.63, ADA on-chain metrics show signs of sell-off

Cardano holders sell ADA at losses 

Cardano price dropped to $0.56 on Wednesday, the lowest level  since mid-February. The altcoin’s decline saw traders shedding their ADA holdings and de-risking for fear of a steeper correction. Santiment data shows that traders realized $20.09 million in losses on Tuesday and nearly $785,000 on Wednesday at the time of writing. 

The Network Realized Profit/ Loss metric sees shows pronounced dips, a sign that alongside the recent price drop, suggests that this could be a capitulation event.

Cardano Network Realized Profit/Loss. Source: Santiment 

Meanwhile, around 64% of the wallet addresses holding Cardano are currently sitting on unrealized gains, as per IntoTheBlock data. If ADA holders start taking profits, it could increase the selling pressure on Cardano and result in a sharper fall in ADA price. 

The $0.59 to $0.64 range is crucial to Cardano’s recovery as it represents the range in which 178,410 wallet addresses bought 2.23 billion ADA tokens. If ADA price closes below the $0.59 level on the daily time frame, another 178,410 wallet addresses will be underwater (meaning that investors will be sitting on unrealized losses).
 

Global In/Out of the Money. Source: IntoTheBlock 

Cardano price could enter distribution phase, bleed further

Cardano price is likely to consolidate further before recovering. The Ethereum alternative has been declining since it hit its year-to-date peak of $0.8104 on March 14. ADA price has corrected nearly 30% since then, down to Wednesday’s intraday low of $0.5689. 

ADA price could collect liquidity below $0.5333, the 23.6% Fibonacci retracement of the altcoin’s rally to the March 14 local top. 

The Moving Average Convergence/Divergence indicator shows there is negative momentum. The Relative Strength Index (RSI) is at 41.25, below the neutral zone, suggesting that bearish momentum could be gaining traction. ADA could generate a buy signal once the RSI dips to 30, the oversold region. 

ADA/USDT 1-day chart 

In an upside scenario, Cardano price could see an impulsive climb past resistance at $0.6291, the 50% Fibonacci retracement level. If ADA price flips this level into support and sees a daily candlestick close above the 50% Fib. level, it would invalidate the bearish thesis and signal a rebound. 

ADA price could march towards the $0.7328 and $0.8104 resistances in its path to the $0.90 target, representing the 127.2% Fibonacci extension level.