Cardano’s FOMO premium is currently facing pressure due to deteriorating on-chain fundamentals. Despite a 28% rebound from its low, ADA remains stuck near a crucial inflection point with its recent rally lacking a strong follow-through. Market cap ranking for ADA has slipped from 8th to 10th, leading to a significant psychological blow. On-chain metrics also confirm this decline, with network throughput falling to $1.35 billion, down from a peak of $7.80 billion recorded in April. ADA has lost ground to rivals Tron and Dogecoin due to its own weakening fundamentals and lack of fresh liquidity entering the ecosystem.
With ADA’s structural support under threat, attention is now turning towards long-term holders. Many LTHs who entered during the election-driven rally are currently at or near their cost basis, either holding unrealized losses or breakeven. This has raised concerns about whether Cardano is entering a broader distribution phase as pressure mounts on LTHs to offload rather than continue HODLing. Metrics like Mean Dollar Invested Age (MDIA) and Age Consumed indicate a trend of older coins being moved or sold, hinting at distribution behavior by long-term holders.
The decline in MDIA and increase in Age Consumed further support the theory of rising sell-side pressure from conviction wallets and a potential distribution phase for ADA. If Cardano fails to hold its $0.63 support level, it could trigger a deeper correction, especially if a market rebound proves short-lived. ADA’s current market value is hovering around levels last seen in November, leaving many LTHs at breakeven or holding unrealized losses. As older coins re-enter circulation and Cardano’s network fails to show strong accumulation, the cryptocurrency may be at risk of further downside if support levels are breached.
In conclusion, Cardano’s FOMO factor is fading fast as the cryptocurrency struggles to maintain its position in the market amid deteriorating on-chain fundamentals. The spotlight is now on ADA’s long-term holders, who are facing pressure to offload their holdings. Metrics like MDIA and Age Consumed suggest a trend of older coins being sold, indicating a potential distribution phase for Cardano. The outlook for ADA remains uncertain as it teeters near key support levels, and a breakdown could lead to a deeper correction in the cryptocurrency. Investors and analysts will be closely watching to see how Cardano navigates these challenges in the coming weeks.
