67% of Cardano holders are underwater, most purchased less than 1 year ago

As the price of ADA fell back to the psychological level of one dollar, more and more investors found that holding the digital asset brought unrealized losses.

Cardano’s ADA token has had a bearish week. Prices have fallen 11.4% since Monday, leaving more holders in the red. What’s more, ADA is now 64.7% below its all-time high of $3.09 on September 2, and is in danger of falling below $1 in the coming days if the trend continues.

More than two-thirds (67%) of ADA holders are underwater, according to IntoTheBlock’s “Money In/Out” metric. A quarter of ADA investors are in the green, and 9% of them are at breakeven.

This metric determines the average cost of buying a token and compares it to the current price ($1.09 at the time of writing).

The analytics provider reported that 3.41 million ADA addresses are in the red status, while only 1.25 million are in the green status.

A related metric is the time tokens are held. The vast majority, or 76%, of ADA holders hold it between 1 and 12 months. Only 11% of Cardano investors have held the token for more than a year, and these investors are still profitable.

From a technical standpoint, ADA has turned bearish and could soon revisit mid-March yearly lows around $0.80. This will leave more investors in the red unless they sell at a loss.

The slide in price may have something to do with the network not living up to the high expectations surrounding the launch of smart contracts. Cardano remains a wasteland in terms of the number of decentralized applications (DApps), with DeFi Llama reporting that there are only ten DeFi protocols operating on the network, with a total value locked at around $233 million.

However, Cardano co-founder Charles Hoskinson believes that many Cardano dApps are waiting for the Vasil hard fork to launch in June. The "Basho" phase of Cardano's upgrade roadmap will focus on scalability and smart contracts, employing a new technology called Hydra to further increase network throughput.

In terms of other fundamentals, Cardano looks relatively strong. When the much-hyped SundaeSwap decentralized exchange launched earlier this year, network demand exploded.

Santiment reported that Cardano is the most developed cryptocurrency project on GitHub in 2021, and Cardano NFT bonds launched this week, providing another investment vehicle for the network.

However, unless there is a marked improvement in trading sentiment, ADA’s sell-off may start to accelerate, leaving more holders in deeper trouble.