- ADA may be showing signs of a local bottom after finding support near key price level
- Assessing whale holdings, especially when compared to 2021, could be key
Cardano’s ADA has been on a downtrend for months now, shedding almost 60% off its value from its YTD top. However, its recent performances suggest that the bearish momentum may be running out of steam. Will this pave the way for ADA’s market bulls?
At the time of writing, ADA was just one spot away from being in the top-10 cryptocurrencies by marketcap. This means it still has an impressive marketcap, something that implies that many are still holding this coin with long-term bullish hopes.
In fact, ADA might already be on the cusp of its next bullish wave judging by its price action over the last few weeks. Sell pressure has been levelling out, with strong support building up around the $0.31 price range. The altcoin also recently retested the same range after sliding down the charts after 25 August.
Source: TradingView
The crypto’s RSI also confirmed a potential pivot at the same price range over the last 2 days. Especially as selling pressure cooled off.
Now, although there is a possibility of the price dipping lower, on-chain data seemed to signal that whales have been taking advantage of the altcoin’s discounted prices.
Assessing the level of accumulation
IntoTheBlock data revealed that ADA whales currently hold more coins than they did during the peak of the 2021 bull run. On 6 September, for instance, the historical concentration suggested that whales held 3.2 billion ADA (9% of the circulating supply).
Source: IntoTheBlock
Zooming out revealed that whales held about 804 million ADA (2.51%) during 2021’s peak. However, they were notably accumulating before the price went parabolic in 2021 and whale balances declined as the price went up.
Over the last few months, we have seen that ADA whale holdings have been growing, indicating that whales have been accumulating on the way down. Investors held 8.6 billion ADA at the last peak while they currently hold around 7.2 billion coins.
Retail holdings were at 23.16 billion at the previous ATH, while they now hold over 25.24 billion coins.
Is it the right time to buy? Well, according to the historic in/out of the money metric, ADA profitability is now at its lowest point in 2024. In other words, most ADA holders are at a loss at the altcoin’s current price levels.
Source: IntoTheBlock
Simply put, roughly 3.73 million addresses are currently at a loss. This figure was at 1.87 million addresses towards the start of 2024.
Additionally, about 575,000 addresses were in the money at the time of writing, while 176,000 addresses were at breakeven.
Here, it is also worth noting that Cardano’s founder is still actively involved in the project. In a recent statement, he described Cardano as the biggest threat to Bitcoin’s dominance.
