Cardano (ADA) Among Only Coins Seeing Loss-Taking: What It Means
29 February 2024 - 2:00AM
NEWSBTC
Cardano (ADA) is among the few cryptocurrencies that are still
observing loss-taking being the dominant behavior among investors.
Bitcoin & Ethereum See Profit-Taking, While Cardano Is Seeing
Capitulation According to data from the on-chain analytics firm
Santiment, Bitcoin (BTC) and Ethereum (ETH) have both been seeing
the investors majorly selling at profits, while Cardano has seen
the loss-taking outweigh the profit-taking. The indicator of
interest here is the “Ratio of Daily On-Chain Transaction Volume in
Profit to Loss,” which, as its name already suggests, tells us
about how the loss-taking volume of any asset compares against its
profit-taking volume. This metric works by going through the
transaction history of each coin currently being moved on the
blockchain to see what price it moved at before this. If the
previous transfer price for any coin was less than the spot value
it is being sold at now, then its sale is contributing towards the
profit-taking volume. Related Reading: Polygon (MATIC) Whale Makes
Large Deposit To Binance, Bearish Sign? Similarly, the coins of the
opposite type (that is, those with last price higher than the
latest transfer price) add to the loss-taking volume. The indicator
takes the total volume of each type and outputs their ratio. Now,
here is a chart that shows the trend in this ratio for a few
different top cryptocurrencies over the last few months: The value
of the metric seems to have been greater than one for most of these
assets recently | Source: Santiment on X As displayed in the above
graph, all of these assets, except for Cardano, have their Ratio of
Daily On-Chain Transaction Volume in Profit to Loss sitting at
positive values right now. Such values of the metric imply the
profit-taking volume is currently greater than the loss-taking
volume for these assets. Ethereum, in particular, seems to have
been observing the most aggressive profit-taking spree recently, as
the cryptocurrency has been seeing about 2.3 green transactions for
every underwater movement. Bitcoin is seeing the second-highest
ratio, with 1.8 profit-taking transactions taking place for every
loss-taking transfer. It’s much more balanced for the altcoins,
however, as XRP (XRP) and Litecoin (LTC) have only been witnessing
minimally higher dominance of profit selling. Cardano has outright
been seeing the loss-taking volume pulling ahead of the
profit-taking one, implying that the investors have been going
through capitulation. These loss sellers may be ditching the asset
in favor of Bitcoin and others, who have offered greener pastures
recently. Related Reading: 95% Of Bitcoin Now In Profit: Why This
Could Be A Signal To Sell Historically, the dominance of
profit-taking has been something that has led to tops for
cryptocurrencies. Loss-taking, on the other hand, has often
facilitated bottoms to form as weaker hands flush out in such
events and stronger, more resolute investors take their coins. As
such, Cardano has been behind the other top coins in this metric
recently may mean that the coin could still have the potential to
rise, whereas the others may be nearing possible tops. ADA Price
While Cardano has performed worse than the likes of Bitcoin and
Ethereum recently, its returns have still not been that bad as the
asset is up 8% over the past week and trading around $0.63. Looks
like the price of the asset has been surging recently | Source:
ADAUSD on TradingView Featured image from Shutterstock.com,
Santiment.net, chart from TradingView.com
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