FOMO cools down, Cardano (ADA) is in danger

Despite recovering 28% from the low of 0.5 USD, Cardano (ADA) is still "stuck" near a key price level, where the market can decide the next direction: a stronger recovery or a deeper decline. The recent uptrend is noteworthy, but it lacks the momentum for sustained stability.

Worryingly, the FOMO effect surrounding ADA is also gradually cooling down – especially since this token has dropped from 8th to 10th place in market capitalization, a significant psychological blow.

On-chain metrics have confirmed this weakening trend. Transaction volume on the Cardano network has dropped to only $1.35 billion – returning to levels before the election of President Donald Trump. This figure previously peaked at $7.8 billion on April 7.

! Source: Artemis TerminalIn other words, Cardano is ceding ground to rivals like Tron (TRX) and Dogecoin (DOGE) — not because they're too powerful, but because ADA's fundamentals are weakening, lacking new money flowing into the ecosystem.

As the structural support of ADA wavers, attention gradually shifts to the long-term holders. Are they losing faith, or is this just a cleansing of investors before the market accumulates again?

Allocation Risks from Long-Term ADA Holders

Interestingly, the current market value of Cardano is fluctuating around the level recorded last November – which is about 5 months ago.

This has caused a majority of long-term holders (LTH) – those who bought during the rally due to the election effect – to currently be at breakeven or facing unrealized losses.

In this context, the question arises: Is Cardano gradually sliding into a phase of widespread distribution? Especially as the pressure is increasing, forcing holders to sell instead of continuing to "HODL" in anticipation of a market recovery.

A notable signal comes from the Mean Dollar Invested Age indicator (MDIA) – 180 days, reflecting the "average age" of the investment cash flow into ADA.

Since mid-March, this indicator has continuously declined – coinciding with the period when ADA failed to hold two important resistance levels. This suggests that old coins are being moved or sold – a typical characteristic of allocation behavior from long-term holders.

Source: SantimentOne of the factors reinforcing this observation is the strong increase in the Age Consumed indicator – reflecting the awakening of long-held coins and bringing them back into circulation. This high index suggests that long-term holding wallets are starting to strategically release their holdings.

The MDIA indicator decreasing along with a significant increase in Age Consumed indicates that selling pressure is rising from the "high confidence" wallet group – a clear sign of the distribution cycle.

What's more worrying: as old coins return to the market but the Cardano network lacks new accumulation flows, ADA may be getting close to losing the $0.63 support level.

If this level is broken, there is a high likelihood that a deeper correction will occur – especially if the market does not recover strongly enough in time.

You can check the price of ADA here.

Disclaimer: This article is for informational purposes only and is not investment advice. Investors should do thorough research before making any decisions. We are not responsible for your investment decisions.

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Itadori

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