Cardano Price Falls 3.77% Amid Geopolitical Tensions and Market Volatility

Cardano’s price has been on a downward trend since late May, despite a respectable 46% rally earlier in the year when Bitcoin surged from $76k to $111.6k. This downward movement has been a concern for investors, as it indicates a bearish outlook for the cryptocurrency. According to an analysis, any potential price bounce for Cardano would likely be overwhelmed by selling pressure, as holders look to exit at break-even or slight profit levels.

Data from Santiment shows that while daily active addresses have remained relatively steady, development activity has been declining since February. This drop in development activity is a concern for long-term investors, as it suggests a lack of progress and innovation within the Cardano network. Additionally, the 90-day MVRV ratio has been positive for nearly two months, indicating that holders of the last 90 days are in profit despite the deep retracement. However, the share of holders in profit is falling rapidly, which means that any attempted recovery from ADA bulls would be met with selling pressure.

The mean coin age has also been on a downtrend, indicating network-wide distribution. This trend would need to change for Cardano to recover. The market structure flipped bearishly on 30 May, when Cardano fell below the $0.71-level. The next low at $0.51 would be the immediate target, and a drop below $0.51 and a retest of the same level as resistance would give a short-selling opportunity targeting the $0.427 support. At the time of writing, a bullish recovery was not in sight, as sellers were too strong. A short-term range formation might be an early sign that a bottom was forming, but it must come alongside heightened demand, such as an uptrend on the mean coin age metric front.

Cardano's price recovery appears to be uncertain in the near future, primarily due to recent market volatility and the impact of external geopolitical events. The crypto market experienced significant liquidations, with approximately 240,000 traders affected in a 24-hour period as a result of US airstrikes on Iran. This event led to total liquidations exceeding $1 billion, which has had a ripple effect on the broader crypto market, including Cardano. The market volatility has weighed heavily on Cardano's price, with ADA falling by 3.77% to $0.5818. Despite the optimism surrounding the upcoming Leios upgrade, which aims to enhance Cardano's capabilities, the market's reaction to geopolitical tensions has overshadowed any potential positive impact from the upgrade. The Leios upgrade is designed to improve the network's functionality and scalability, but the current market conditions have made it challenging for Cardano to capitalize on these advancements.

The broader market sentiment also plays a crucial role in Cardano's price movements. Although some analysts suggest that altcoins, including Cardano, may not be completely written off in this cycle, the current market conditions indicate that a price recovery is unlikely in the near term. The market's focus on geopolitical risks and the overall bearish sentiment have created an environment where investors are cautious about making significant moves in the crypto space. The impact of external factors, such as geopolitical tensions and market volatility, highlights the challenges faced by Cardano in achieving a price recovery. While the Leios upgrade represents a positive development for the network, the current market conditions have made it difficult for Cardano to translate these improvements into price gains. Investors are likely to remain cautious until there is a clearer indication of market stability and a reduction in geopolitical risks.