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ADA Price Surge Could Push Losing Holders Ratio Below 55%
Cardano (ADA), the proof-of-stake blockchain network known for its smart contracts, has defied recent predictions of a drop from the top 10 cryptocurrency rankings by market capitalization.
In a surprising move, ADA instead became the best performing among the major coins, recording a 7% increase in the last 24 hours. This price action has sparked discussions about ADA’s potential to revisit its glory days in 2021, when it peaked at $3.10.
A Tale of Two Whales: Retail Hoarding vs. Profit taking
The recent price increase can be attributed to two key factors: an increase in buying pressure and a potential impending “battle of the whales”.
On-chain data reveals that retail investors, the so-called “whaley” masses, have been accumulating ADA aggressively, particularly between $0.48 and $0.50. This large group of buyers could act as a support system if the price reaches that level.
However, hiding under bullish sentiment presents a potential obstacle. Data shows that only 40% of current ADA holders make a profit.
A price increase to $0.49 could be particularly significant, as it could push the losing holders ratio below 55%. This milestone could trigger further buying pressure as more investors see an opportunity to move into profit territory.
Return of the whales? On volume and the market cycle
The price of Cardano The rally is also fueled by a significant increase in trading volume, which reached a weekly high of $461 million, according to Santiment. This increase in activity indicates growing interest in ADA, which could push the price further higher.
But is it possible to sustain this momentum? The answer may lie with the “original whales,” the large investors who hold a significant portion of the cryptocurrency.
Interestingly, the current distribution of ADA shares some similarities with the market conditions in 2021, when the price reached $3. Back then, whales held about 6% of the total supply. Today, that number stands at nearly 7%, suggesting a potential comeback for these big players.
However, analysts warn that the success of this “return of the whales” narrative depends largely on the broader market cycle. If the current bull market reaches its peak, ADA’s price growth could be limited, hindering its ability to revisit its all-time high.
Can the ADA defy the odds?
Cardano’s recent price increase has instilled a sense of cautious optimism in the cryptocurrency community. While strong buying pressure from retail investors and the potential return of whales are positive signs, the profitability of current holders and the unpredictable nature of the market cycle pose challenges.
In the coming weeks, it will be crucial to watch whether ADA can overcome the selling pressure at $0.49 and sustain its bullish trajectory. If trading volume continues to increase along with the price, and if the current bull market holds, ADA could surprise everyone and revisit the long-awaited $3 mark.
Featured image of Pexels, TradingView chart