As Cardano (ADA) prices fall back to the psychological one-dollar level, more and more investors are finding themselves with unrealized losses by holding on to the digital asset.
Cardano’s ADA token is coming off a bearish week. The price is down 11.4% since Monday, which has left more holders in the red. More importantly, ADA is now 64.7% off its all-time high of $3.09 set on Sept. 2 and is at risk of falling below a dollar in the next few days should the trend continue.
According to IntoTheBlock’s In/Out of the Money indicator, more than two-thirds or 67% of ADA holders are underwater. A quarter of Cardano investors are in the green and 9% of them are breaking even.
The indicator identifies the average cost at which the tokens were bought and compares it to the current price, which was $1.09 at the time of writing.
The analytics provider reported that 3.41 million ADA addresses are in the red, compared to just 1.25 million in the green.
A related metric is the time the token was held. The vast majority, or 76%, of ADA holders have held it between one and 12 months. Only 11% of Cardano investors have held the token for more than a year, and these are the ones still making profits.
From a technical perspective, ADA has turned bearish and could retrace its 2022 yearly low of around $0.80 fairly quickly, which occurred in mid-March. This would put even more investors in the red if they didn’t sell at a loss.
The price drop could be related to the network not living up to the high expectations surrounding the launch of smart contracts. In terms of the number of decentralized applications (DApps), Cardano is still something of a wasteland as DeFi Llama reports that only ten DeFi protocols are running on the network with a total locked value of around $233 million.
However, Cardano co-founder Charles Hoskinson believes that many Cardano dApps are awaiting the launch of the Vasil hard fork in June. The “Basho” phase of the Cardano upgrade roadmap will focus on scalability and smart contracts using a new technology called Hydra to boost network throughput even further.
Related: The Cardano Foundation and the University of Zurich are expanding academic blockchain research
In terms of other fundamentals, Cardano looks relatively strong. Network demand surged to record capacity earlier this year when the much-vaunted decentralized exchange SundaeSwap launched.
Santiment reported that Cardano was the most developed crypto project on GitHub in 2021, and Cardano NFT bonds were revealed this week and provides another investment vehicle on the network.
However, unless there is a significant reversal in trading sentiment, the ADA sell-off could accelerate and submerge more holders deeper.
https://cointelegraph.com/news/67-of-cardano-holders-underwater-and-most-bought-less-than-1-year-ago 67% of Cardano holders submerged and most bought less than a year ago