Cardano's ADA May Be Primed for a Bullish Reversal as Whales Accumulate

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.

Cardano’s native cryptocurrency, ADA, has been enduring a downtrend for several months, losing almost 60% of its value since the beginning of the year.

However, recent observations suggest that the bearish momentum may be weakening. Could this development pave the way for a bull rally?

At press time, ADA was ranked 11th among cryptocurrencies by market capitalization. Despite being outside the top 10, it still boasts a substantial market cap, indicating that many investors continue to hold the coin with long-term bullish aspirations.

Examining ADA’s price action over the past few weeks reveals that it may already be poised for its next bull wave. Sell pressure has been gradually easing, and strong support is building around the $0.31 price level. Notably, the altcoin recently retested this range after sliding down the charts following 25 August.

A glance at ADA’s Relative Strength Index (RSI) on the 2 days chart also seems to confirm a potential pivot at the same price range, especially as selling pressure showed signs of cooling off.

Interestingly, while there remains a possibility of the price dipping lower, on-chain data appeared to indicate that whales have been taking advantage of the altcoin’s discounted prices.

Assessing the level of accumulation

According to data from IntoTheBlock, ADA whales currently hold more coins than they did during the peak of the bull run in 2021. For instance, on 6 September, the historical concentration suggested that whales held 3.2 billion ADA (9% of the circulating supply).

Zooming out further reveals that during 2021’s price peak, whales held about 804 million ADA (2.51%). However, it’s worth noting that whales were notably accumulating before the price went parabolic in 2021 and that whale balances declined as the price went up.

Over the past few months, we have seen that ADA whale holdings have been increasing, indicating that whales have been accumulating on the way down. At the last peak, investors held 8.6 billion ADA, while currently, they hold around 7.2 billion coins.

Meanwhile, retail holdings were at 23.16 billion at the previous ADA all-time high (ATH), whereas currently, they hold over 25.24 billion coins.

Is it a good 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.

To put it simply, roughly 3.73 million addresses are currently at a loss, compared to 1.87 million addresses at 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.

It is also noteworthy that Cardano’s founder remains actively engaged in the project. In a recent statement, he described Cardano as the biggest threat to Bitcoin’s (BTC) dominance.

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