Why is Cardano Price Down Today? Insights and Key Factors

Cardano, or ADA, is experiencing a three-day decline in price as it finds it hard to sustain its support levels. On-chain metrics are weak, with a bearish technical outlook and critical resistance points holding its upward momentum.

What is Causing the Drop in Cardano Price?

Cardano (ADA) remains weak, posting losses for the third day running on November 4. According to Cointelegraph Markets Pro and TradingView, ADA had fallen from a high of $0.363 on November 2 to a low of $0.328 on November 3, which is an enormous 9.6% decline.

Cardano trades at around $0.332 at press time, down 2.7% over the last 24 hours.

Fading On-Chain Cardano Signals

On-chain data depicts waning interest and liquidity. Cardano's DEX trading volume, by Artemis, declined to $1.83 million on November 3, the lowest since mid-October, from $4.2 million on October 31. Total daily trading volume dropped by 51% from $545 million to $361 million in the same period.

Data from DefiLlama shows that the total value locked in the Cardano network decreased from $248.6 million on September 28 to $208.5 million on November 4, corresponding with a 7% decrease in ADA price over the last 30 days and is an indicator of lesser trading activity and interest.

Technical Analysis Exposes Price Weakness in ADA

In practical terms, ADA is already technically in a corrective phase starting from a mid-March $0.81 peak high. Traders started pulling up their profits when the Relative Strength Index of ADA breaks above 70, with an overbought characteristic that usually leads to corrections.

On larger time frames, ADA is still in its downtrend inside a clear descending parallel channel. That is, its weekly Relative Strength Index stands at a value of 41 points, which is a show of continued downward pressure as per the RSI.

What are the Key Resistance Flipping the Script on Recovery for ADA?

The latest ADA price pullback brings attention to resistance at the top of the descending channel, approximately $0.34. If bulls cannot convert this into support, then the downtrend should continue. The Money Around Price (IOMAP) model reflects nearly 2.78 billion ADA bought in the $0.49 to $0.358 range, suggesting strong resistance -- enough to soak up a lot of buying pressure.

For Cardano bulls, this is the zone to flip to be support that would limit further downside.

Disclaimer: Do not construe this analysis as an investment advice. Always research thoroughly before investing.

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