- Cardano overtook Polkadot as the project with the highest development activity.
- ADA could face another 15% if bulls fail to defend the $0.43 support.
- Funding Rate stalled, indicating that ADA could consolidate or decrease further.
In the last 30 days, Cardano (ADA) triumphed over Polkadot (DOT), and its sister-project Kusama (KSM) to become the blockchain with the highest development activity.
Development activity on a blockchain refers to the public GitHub repositories linked to a project. When the metric increases, it means a project has shipped out more features on its network.
However, a decrease in the development activity implies that code commits by developers have reduced.
In many instances, Polkadot, as well as Kusama, have topped this chart. So, being in second and third position while Cardano leads, suggests that developers’ commitment to the network has not been as high as they were.
Typically, a high development activity could be bullish for a project. But for the Cardano native token, this was not the case, Over the last 30 days, ADA has lost 24.93% of its value, due to the surge in selling pressure.
A Sell Signal Presents Itself
At press time, the token’s price was $0.46. On looking at the Supertrend indicator on the 4-hour chart, Coin Edition noticed that ADA closed below it. This implies that the 5-day EMA had fallen below the 20-day EMA.
This position is considered a sell signal. So, there is a likelihood the ADA’s price will continue to fall. If bulls are unable to defend the $0.43 support, there could be an extra 15% correction which sends ADA down to $0.38.
Furthermore, the Relative Strength Index (RSI) revealed that there was a dearth of buyers. At the time of writing, the RSI was 25.03. This indicates that ADA had become oversold and the potential for an upside reversal had become extremely low.
When the RSI hit 30.00, bulls should have attempted to retest the $0.50 resistance. But since that was not the case, a further plunge could be on the cards.
In terms of the Funding Rate, Coinglass data showed that the indicator had stayed flat for some time. Funding Rate is the cost of holding an open perpetual position in the derivatives market.
ADA’s Funding Rate meant that the difference between the spot price and the perp price was small.
From a trading perspective, the stalling Funding Rate suggests that neither short nor longs are aggressive. So, ADA could either consolidate or the price could continue correcting.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
