The dormant wallet has started to awaken! Cardano encounters unfavourable information from Trump in the Middle East, causing selling pressure that leads to a significant pullback in ADA profits.

Gate news, on Monday (June 23) during the Asian afternoon session, the price of Cardano (ADA) rebounded following the crypto assets market, reported at $0.54, but still unable to fully recover the losses from the weekend. Due to the escalation of tensions in the Middle East after President Trump's attack on Iran, selling pressure caused a significant pullback in ADA profits.

The previous week, ADA fell nearly 15% due to the escalation of tensions in the Middle East following the U.S. attack on Iran. This double-digit pullback triggered a wave of liquidations, resulting in a total loss of nearly $17 million in long positions last week. Additionally, on-chain indicators support the bearish view, as the profit-taking and dormant wallet activity of ADA are increasing, indicating that selling pressure is intensifying.

As tensions in the Middle East escalate, the price trend of ADA is weak. The ongoing war between Israel and Palestine has further intensified due to the U.S. attacking Iran on Saturday night. Trump announced that three nuclear facilities in Iran were attacked.

The Santiment network's Profit/Loss (NPL) indicator shows that ADA holders are realizing some profits.

Non-performing loans surged significantly on June 16, reaching the highest level since early March; a similar spike was observed on Friday, although to a lesser extent. These surges indicate that holders are, on average, selling their bonds at a considerable profit, thereby increasing the selling pressure.

According to Santiment's consumption age index, bearish signs are also indicated. The peak of this index suggests that dormant tokens (tokens that have been stored long-term in wallets) are moving, which can be used to judge short-term local tops or bottoms. Similar to the situation with Cardano, history shows that as holders move tokens from wallets to exchanges, the ADA price tends to surge followed by a drop, thereby increasing selling pressure. The latest rise on Friday suggests that ADA is poised for a downward trend.

ADA Price Outlook

FXStreet analyst Manish Chhetri stated that on June 11, the price of ADA fell below the 200-day Exponential Moving Average (EMA). In the following 11 days (up to Sunday), the price plummeted nearly 25%, reaching a low of $0.51, the lowest level since early February.

In addition, last week's price closed below the ascending trend line (drawn by connecting multiple lows since early November), indicating a bearish trend. As of Monday when this article was written, the price hovers around $0.54.

If ADA continues its downward trend and the daily closing price falls below the weekly support level of $0.49, its decline may extend to the next daily support level of $0.45.

The Relative Strength Index (RSI) reading is 26, reflecting an oversold condition, indicating strong bearish momentum. However, as the RSI reaches an oversold state, the likelihood of a pullback is high. Additionally, the Moving Average Convergence Divergence (MACD) on the daily chart shows a bearish crossover. It also displays a rising red histogram below the neutral level, indicating strong bearish momentum and suggesting that the downtrend will continue.

However, if ADA recovers, it may continue the rebound momentum to the previously broken trend line level of 0.60 dollars.

(Source: FXStreet)