67% of Cardano holders underwater and most bought less than 1 year ago

As Cardano (ADA) prices fall back towards 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 has had a bearish week. The price has fallen 11.4% since Monday resulting in more holders being in the red. More significantly, ADA is now 64.7% below its September 2 all-time high of $3.09 and is in danger of falling below a dollar over 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 at a breakeven point.

The indicator identifies the average cost at which the tokens were purchased 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 amount of time the token has been held. The vast majority, or 76% of ADA holders, have held it for between one and 12 months. Just 11% of Cardano investors have held the token for more than a year, and those are the ones that are still in profit.

From a technical standpoint, ADA has turned bearish and could quite quickly revisit its 2022 and yearly low point of around $0.80, which occurred in mid-March. This would plunge even more investors into the red unless they sell at a loss.

The slide in prices could be tied to the network not living up to high expectations set around the launch of smart contracts.  In terms of the numbers of decentralized applications (DApps), Cardano is still something of a wasteland with DeFi Llama reporting that there are just ten DeFi protocols running on the network with a combined total value locked of around $233 million.

Cardano co-founder Charles Hoskinson however believes that many Cardano dApps are waiting for the Vasil hard fork in June to launch. The “Basho” phase of the Cardano upgrade roadmap will focus on scalability and smart contracts with new technology called Hydra to boost network throughput even further.

Related: Cardano Foundation and the University of Zurich expand academic blockchain research

In terms of other fundamenta Cardano is looking relatively strong. Network demand surged to record capacity earlier this year when the much-hyped SundaeSwap decentralized exchange was launched.

Santiment reported that Cardano was the most developed crypto project on GitHub in 2021, and Cardano NFT bonds were unveiled this week, providing another investment vehicle on the network.

However, unless there is a significant turnaround in trading sentiment, the ADA selloff may start to accelerate, putting more holders deeper underwater.