As Cardano Whales Start Stacking Again, Can ADA’s Price Take a U-turn?

Key Insights:

• ADA whales have resumed stacking as the price still trades under $1.
• Active entities on Cardano are still stagnant.
• While there is a short-term RSI recovery, sell-side pressure is still dominant.

The public, decentralized, and proof-of-stake (PoS) blockchain, Cardano was a significant achiever in 2021 presenting one of the highest market gains for its HODLers. While Cardano has had its glory days, the altcoin now seems to struggle to keep its spot in the top ten crypto assets.

On May 3, at the time of writing, ADA was down by 74.31% from its all-time high price of $3.10 made on Sept. 2, 2021. Although ADA’s price has been on a downwards spiral for the last week, few market indicators presented bullish divergences for the altcoin.

Whales swimming back to ADA

ADA’s price oscillated at $0.7933 at the time of writing, presenting moderate gains of 2.51% over the last day. However, the coin was still down by 9.61%, over the previous seven days, as the ninth-largest cryptocurrency by market capitalization continued its macro price drawdown.

ADA’s recent price downtrend has continued for 27 days falling short of a month by just a few days. This, however, isn’t ADA’s longest price drawdown — the December 2021 price fall lasted for almost 45 days for the coin.

Nevertheless, the latest data and statistics present some optimism for ADA HODLers. Data from crypto analysis platform Santiment on May 3 highlighted that ADA whale addresses holding 1 to 10 million ADA have been accumulating their bags over these past five weeks.

Usually, whale accumulation after a bearish phase is a good sign for tokens’ prices as they tend to rally on renewed sentiment. For ADA, a combination of macro price factors, whale accumulation, and bullish divergences could favor the coin’s price.

Ecosystem growth remains intact

Apart from the growth in accumulation by whale entities, Cardano’s network growth seems to be supporting price rise in the near future provided the larger market remains stable. In a recent Twitter post, the firm behind Cardano blockchain, IOHK, revealed that 925 projects are being built on top of the blockchain.

Notably, NFT collections dominate Cardano’s ecosystem chart with a massive 46.6%, while NFT marketplaces, metaverse projects, DeFi, gaming, lending, DEX follow suit with 4.1%, 3.4%, 1,9%, 4.2%, 1.7%, and 3.8%, respectively.

🌿The flourishing Cardano #DApp ecosystem continues to grow. Let's have a look at yet another recap of #BuildinOnCardano and review what's happened in #Cardano ecosystem over the last week.

Ready? pic.twitter.com/q6TwSuD5eZ

— Input Output (@InputOutputHK) May 2, 2022

A worrying factor for Cardano’s price was that active addresses have mainly remained stagnant. While the number of native tokens on the Cardano blockchain has witnessed a rise, according to the Cardano Blockchain Insights dashboard, ADA’s rangebound price movement has kept newcomers at bay.

Additionally, the total value locked (TVL) on Cardano has fallen to the low level near $196.58 million after setting a yearly high above $320 million in end-March.

However, positive ecosystem developments continue to boast the network. As reported by FX Empire earlier today, Cardano dApp developers and users will be able to leverage Partisia Blockchain’s privacy-preserving tools for more robust privacy.

Local low established?

Looking at ADA’s long-term price structure, the ninth-largest coin by market cap was in a longer downtrend since September, after making an ATH. While the token saw occasional short-term price pumps due to the larger market’s bullishness, its price primarily made lower lows.

Since ADA’s price was testing the lower $0.75 support, many in the market believed that a local price low had been established and a positive price rebound could be expected.

While an uptick in ADA’s relative strength index on a daily chart supports positive price movement, a relief rally can be expected once RSI has recovered from the oversold zone.

However, in the near term, if selling pressure continues to push prices down, a revisit to the $0.68 support could be expected. Notably, data from IntoTheBlock highlighted that 93% of ADA HODLers were out of money or in a loss at press-time prices.

For now, investors seem to be hopeful that ADA could see decent price gains ahead of the Vasil hard fork, scheduled for June. The goal of the hard fork would be growing the protocol and dramatically increasing its transaction throughput, as well as volume and liquidity; the same could aid bullish momentum for price.