Cardano (ADA) recently faced a sharp price decline, dropping 11% within 48 hours to around $0.35. For the second time in a month, the altcoin failed to close above $0.40. Despite the decline, Cardano still holds potential for recovery, offering both traders and long-term investors an opportunity to regain profits.

Cardano Eyes a Profitable Comeback

This recent price drop caused a significant loss in profitability for 3.31 billion ADA tokens. According to the Global In/Out of the Money (GIOM) metric, these tokens, worth over $1.1 billion, were acquired when Cardano traded between $0.35 and $0.37. Currently, this supply remains underwater. However, if ADA can recover above $0.37, these tokens would return to profitability.

Investors closely monitor this key price range, knowing that a move above $0.37 would not only restore profits but also boost market confidence. An upward shift could prompt further price gains.

Steady Investor Sentiment Amidst Decline

Despite the 11% drop, Cardano investors have remained composed. The realized profit/loss indicator shows no significant spike, indicating little panic selling. This behavior signals that ADA holders are holding onto their positions, avoiding selling at a loss. Investor confidence in Cardano’s long-term potential remains intact, even during short-term price volatility.

This stability plays a critical role in preserving momentum. By holding their positions, investors are maintaining ADA’s potential for a quicker recovery, which could trigger a rally if market conditions improve.

ADA Price Prediction: Will the Momentum Shift?

At the time of writing, Cardano hovers near $0.35, just above the crucial $0.34 support level. A successful defense of this support could spark a rally toward $0.37. If ADA flips $0.37 into support, the 3.31 billion ADA tokens purchased between $0.35 and $0.37 will turn profitable. This shift may boost investor confidence, reduce selling pressure, and drive the price upward.

However, failure to break the $0.37 resistance would likely trap ADA in consolidation below this barrier. If ADA drops below $0.34, it could invalidate the bullish outlook, leading to further losses and shaking short-term investor confidence.

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