Cardano (ADA) has experienced a significant decline, sinking 22% in just one week. As of writing, the eighth-largest cryptocurrency by market capitalization is priced at $0.74. This sharp drop in price reflects the broader market downturn. However, despite the short-term price plunge, Cardano’s long-term holders (LTHs) remain unfazed. In fact, on-chain data suggests that these holders are confident and continuing to accumulate, which could point to a potential price rebound in the near future.

Long-Term Holders Show Resilience

One of the key indicators suggesting the resilience of Cardano’s long-term holders is the rise in its Mean Coin Age. This metric tracks the average age of all coins in circulation and is often used to gauge investor behavior. According to data from Santiment, Cardano’s Mean Coin Age has increased by 1% since March 3. A rising Mean Coin Age suggests that investors are not selling their ADA but instead holding onto their assets. This trend is important because it shows that, despite the recent price decline, long-term investors continue to place value on ADA’s potential in the future.

The growing confidence among Cardano holders is also reflected in the actions of ADA whales. These large investors, holding between 100,000 and 1,000,000 ADA, have added 20 million ADA to their holdings over the past week. When whales accumulate more coins, it usually reduces the circulating supply of the asset, which can lead to upward price pressure in the market. This large-scale accumulation highlights the trust that major investors have in the long-term value of Cardano, suggesting that the token may have the potential for future growth.

Positive Sentiment and Potential for Recovery

The overall sentiment around Cardano remains positive, especially when looking at the Balance of Power (BoP) indicator. The BoP compares the strength of buyers to sellers, and when its value is positive, it means that buyers are in control. Cardano’s current BoP stands at 0.30, suggesting that buyers are dominating the market at the moment. This could indicate a potential for upward momentum in the coming days. If this buying pressure continues, ADA could target the next resistance level at $0.94.

Breaking through the $0.94 resistance level would be a key milestone for Cardano, signaling the beginning of a potential recovery. If ADA manages to hold this level and establish it as support, there could be more upward momentum, with a target of $1.16 in the medium term. These levels would represent a significant recovery from the recent lows and provide a positive outlook for those holding Cardano for the long term.

Risks and Challenges

However, the potential for a rally depends on the continuation of buyer dominance. If the market sentiment shifts and selling pressure increases, Cardano’s price could face further declines. In particular, if ADA fails to hold its current support at $0.60, the price could drop even further, potentially pushing Cardano below the critical support level. A fall below $0.60 would likely signal a more bearish trend and could lead to further losses.

Conclusion

While Cardano has suffered a 22% drop in price over the past week, long-term holders remain confident, as seen in the rise of Mean Coin Age and increased whale accumulation. These factors suggest that the long-term outlook for ADA remains strong, despite recent market challenges. If Cardano can break through the $0.94 resistance level, it could initiate a rally, with the potential for the price to reach $1.16. However, if selling pressure intensifies and ADA fails to hold its support at $0.60, the price could face further declines. The coming days and weeks will be crucial in determining whether Cardano can maintain its bullish momentum or if further challenges lie ahead.