Cardano Shows Bullish Accumulation Amid Mixed On-Chain Metrics
NOIDA (CoinChapter.com)—Cardano’s ADA token continued its uptrend despite a slight hiccup on Aug. 7. The token spiked nearly 5% on Aug. 8 to reach a daily high near $0.34.
Cardano’s upcoming Chang update might be related to ADA’s recent performance. Regular updates on social media platforms share the progress of the hard fork’s launch phase. According to the latest posts, Chang’s implementation across nodes reached 63%.
On-Chain Metrics Remain Confused
Meanwhile, recent data reveals an accumulation trend among ADA holders. Large holders, with balances over 1 million ADA, show a slight increase in the number of addresses and a consistent rise in supply. This indicates strong confidence in ADA’s long-term potential.
Similarly, mid-large holders, those with over 100,000 ADA, have maintained stability in address numbers while steadily increasing their holdings. Moreover, mid-sized holders with balances above 10,000 ADA present a mixed picture.
The number of addresses has slightly decreased, but the overall supply has risen. This suggests some distribution but also significant accumulation by remaining holders. Smaller holders, with over 1,000 ADA, exhibit a marked decline in address numbers but a noticeable increase in supply.
This indicates that while some smaller investors are selling, others are accumulating more ADA.
On the other hand, the declining MVRV ratio, now at -0.548, indicates that many ADA holders are at a loss, reducing the likelihood of significant sell-offs. Whale transactions, defined as transfers exceeding $100,000, have decreased recently, suggesting reduced activity from large investors.
The combination points to a cautious market sentiment with limited sell-off risk but also a lack of strong buying signals from major investors.
Overall, the accumulation across different holder categories points to a strong bullish sentiment. Large and mid-large holders are driving this trend, reflecting confidence in ADA’s future.
The distribution among smaller holders does not significantly impact the overall positive outlook. Consequently, the data suggests potential upward pressure on ADA’s price, supported by the accumulation behavior of significant investors.
ADA Price Rallies, But Bears Difficult To Defeat
ADA price rallied on Aug. 8, but the long upper wicks on the recent daily candles highlight the presence of bears around the 0.5 FIB retracement level near $0.335. The token is moving inside a bullish pattern called the ‘falling wedge,‘ but a breakout seems unlikely in the near future.
For the bulls to kickstart a rally, ADA price would need to move above the resistance near $0.35 before targeting the 20-day EMA (red) resistance near $0.375.
On the other hand, if the ADA USD pair fails to start a rally, the Cardano token would likely face a drop to the support near $0.32. Failure of immediate support could send ADA price hurtling to the support near $0.3 before recovering.
The RSI for ADA remained neutral, with a score of 36.95 on the daily charts.
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