Why is Cardano price down today?

Cardano (ADA) is showing weakness as it’s heading for the third day of losses in a row on Nov. 4. 

Why is Cardano price down?

Data from Cointelegraph Markets Pro and TradingView reveals that the ADA price fell from a high of $0.363 on Nov. 2, dropping as much as 9.6% to a low of $0.328 on Nov. 3.

Cardano price is down 2.7% over the last 24 hours to trade at $0.332 at the time of publication.

Let’s look closer at the factors driving ADA price down today.

Weakening onchain Cardano metrics

Data from Artemis reveals that the drop in ADA price coincides with a drop in investors’ interest and liquidity in Cardano. 

Artemis Terminal data shows that ADA’s daily DEK trading volume fell from $4.2 million on Oct. 31 to $1.83 million on Nov. 3, the lowest level since mid-October. 

Daily trading volume was reduced by 51% from approximately $545 million to $361 million over the same period.

Additional data from DefiLlama suggests that total value locked (TVL) on the Cardano network has decreased from $248.6 million on Sept. 28 to $208.5 million on Nov. 4.

The decline in daily trading volume, DEX volume and TVL coincides with ADA’s 7% price drop over the last 30 days, suggesting overall less activity and trader interest in Cardano.

ADA price technicals remain bearish

From a technical point of view, the ongoing correction in the price of ADA is part of a corrective cycle that started in mid-March after the token hit a two-year high of $0.81.

Traders booked profits as ADA’s relative strength index (RSI) on the daily chart became overbought after crossing 70.

An RSI reading above 70 means the asset is becoming “overbought” and may undergo trend reversal or corrective pullback.

On longer timeframes, ADA remains in a downtrend inside a descending parallel channel on the weekly candle chart. The RSI is positioned at 41, suggesting that the market conditions still favor the downside.

Cardano price faces uphill battle

The recent retracement in ADA price showed signs of further weakness after rejection from the descending channel’s upper boundary at $0.34— confirming a stiff barrier around this level.

If the bulls fail to flip this level to support, then ADA’s likelihood of continuing its prevailing downtrend will be much higher.

This negative outlook is corroborated by the Money Around Price (IOMAP) model, showing that the channel’s upper boundary at $0.34 sat within the $0.49 to $0.358 price range, where approximately 2.78 billion ADA were bought by roughly 153,3700 addresses.

In other words, this resistance was robust enough to absorb the buying pressure attempting to push the ADA price higher. Therefore, it is crucial for the Cardano Bulls to flip this zone into support to avoid further losses.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.