Cardano (ADA), the proof-of-stake blockchain network known for its smart contracts, has defied recent predictions of a drop in the top 10 cryptocurrency rankings by market cap.
In a surprising move, ADA has become the best performer among major coins, experiencing a 7% increase in the last 24 hours. This price action has sparked discussions about ADA’s potential to revisit its glory days of 2021 when it peaked at $3.10.
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A tale of two whales: retail accumulation vs. Making a profit
The recent price increase can be attributed to two main factors: an increase in buying pressure and a potential upcoming “battle of the whales”.
On-chain data reveals that retail investors, the so-called “whaley” masses, have been accumulating ADA aggressively, especially between $0.48 and $0.50. This large group of buyers could act as a support system if the price reaches this level.
However, hiding behind bullish sentiment is 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 loss-making holder ratio below 55%. This milestone could trigger more buying pressure as more investors see an opportunity to enter profit territory.
![Rising ADA price could push proportion of holders with losses below 55% 1 a c0bdcf](https://thegurumedia.com/wp-content/uploads/2024/05/a_c0bdcf.png)
Return of the whales? About volume and market cycle
Cardano Price The recovery is also being fueled by a significant increase in trading volume, reaching a weekly high of $461 million, according to Santiment. This increase in activity indicates growing interest in ADA, which could drive the price even higher.
![Rising ADA price could push proportion of holders with losses below 55% 2 a bd85f0](https://thegurumedia.com/wp-content/uploads/2024/05/a_bd85f0.png)
But can this momentum be sustained? The answer may lie in the “original whales”, the large investors who hold a significant part of the cryptocurrency.
Interestingly, ADA’s current distribution shares some similarities with market conditions in 2021, when the price reached $3. At that time, whales held about 6% of the total supply. Today, that number is almost 7%, suggesting a potential return for these big players.
However, analysts warn that the success of this “return of the whales” narrative depends heavily on the broader market cycle. If the current bull market reaches its peak, ADA’s price growth could be constrained, hindering its ability to revisit its all-time high.
Can ADA defy the odds?
Cardano’s recent price surge 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.
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In the coming weeks, it will be crucial to observe whether ADA can overcome the selling pressure at $0.49 and sustain its upward trajectory. If trading volume continues to increase along with the price, and if the current bull market continues, ADA could surprise everyone and revisit its long-awaited $3 mark.
Featured image from Pexels, chart from TradingView