67% of ADA holders are underwater, a quarter of Cardano investors are in the green
As Cardano (ADA) price drops back to psychological one-dollar levels, more and more investors find themselves with unrealized losses by holding onto the digital asset.
67% of Cardano holders are underwater and most bought less than one year ago
Cardano’s ADA token has had a bearish week. The price has dropped 11.4% since Monday leading to more holders. More notably, ADA is currently 64.7% below its September 2 all-time high of $3.09 and risks falling below a dollar over the next few days if the trend continues.
According to IntoTheBlock’s “in/out” indicator, more than two-thirds, or 67% of ADA holders, are underwater. A quarter of the investors in Cardano are bullish, and 9% of them are breaking even.
The indicator determines the average cost of tokens purchased and compares it to the current price, which is $1.09 at press time.
The analytics provider reports that 3.41 million ADA addresses are red compared to just 1.25 million in green.
In/Out of the Money: IntoTheBlock
A relevant metric is the amount of time the token has been held. The vast majority, or 76% of ADA holders, have held it for 12 months. Only 11% of Cardano investors have held the token for more than a year, and those are the ones that are still profitable.
From a technical point of view, ADA has turned bearish and could quickly return to its 2022 low and its yearly low of around $0.8, which occurred in mid-March. This will leave even more investors in the red unless they sell at a loss.
The slippage could be related to the network failing to live up to the high expectations set around the launch of smart contracts. In terms of the number of DApps, Cardano remains a wasteland, with DeFi Llama reporting that there are only ten DeFi protocols running on the network with a total locked value of around $233 million.
However, Cardano co-founder Charles Hoskinson believes that many Cardano dApps are waiting for the Vasil hard fork in June, to launch. The “Basho” phase of the Cardano upgrade roadmap will focus on scalability and smart contracts with Hydra’s new technology to boost network throughput even further.
In terms of other fundamentals, Cardano is looking relatively strong. Network demand surged to record levels earlier this year when the much-hyped decentralized exchange SundaeSwap launched.
Santiment reports that Cardano was the fastest growing crypto project on GitHub in 2021, and the Cardano NFT bond was announced this week, providing another investment vehicle on the network.
However, unless there is a significant shift in trading sentiment, the ADA sell-off could begin to accelerate, sending many holders deeper.
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