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On-chain analytics firm IntoTheBlock observes that despite the recent market rally, only 35% of ADA holders are in profit, significantly lower than other major protocols.
This implies that 65% of holders are in losses on their holdings. However, out of this chunk, 57% of holders might be "truly" in losses.
For clarity's sake, it might be necessary to break this down further. The Global In/Out of the Money from IntoTheBlock classifies addresses based on whether they are profiting (in the money), breaking even (at the money), or losing money (out of the money) on their positions at the current price.
Based on this indicator, 1.59 million addresses, or 35.71% of holders, are profiting or in the money; 2.54 million addresses, or 57.10%, are in losses or out of money. A total of 7.19% of holders, or 319,430 addresses, are at the money. This is at ADA's current price of $0.376.
Tomiwabold OlajideHaving an idea of the proportion of addresses that are losing money on their positions might help users get a clearer sense of the selling pressure at a certain price range.
A price range where the majority of users are losing money will have a lot of selling pressure because many of these addresses will want to sell whenever the market price approaches their average cost and break-even point on their positions. This will function as a barrier to further price increases at those levels.
In this respect, IntoTheBlock's on-chain data reveals a key resistance at $0.38, with 7.19 billion ADA acquired here.
According to IntoTheBlock, clearing this level might salvage the situation of about 65% of Cardano holders in losses or even on their positions. This is because breaching this level might reduce resistance, which would potentially boost holder profits.
If the $0.38 barrier is breached, ADA may set its sights on the $0.41 level. ADA was down 2.05% in the last 24 hours to $0.376 at the time of writing, mirroring the general market declines.
Arman Shirinyan
Alex Dovbnya
Vladislav Sopov
Dan Burgin