- ADA’s market cap decline did not stop the whales from accumulating.
- A bull run for the token could occur in early 2024, according to an analyst.
Cardano’s [ADA] price action has not been one to excite holders in recent times. In the last 30 days, ADA dropped by 12.97%. And this was followed by a decline in market cap. This period of underwhelming performance implies that ADA’s circulation was much lower than it was about four months back.
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Taking the big leap of faith
Notwithstanding, data from Santiment showed that the number of wallets holding 100,000 ADA and more reached 25,294 over the last 16 months.
This increase implied that the cryptocurrency’s large holders, often referred to as “whales” and “sharks,” appeared to be maintaining their confidence in the project’s long-term potential.
However, their retail counterpart didn’t share the same sentiment. At press time, on-chain data showed that the number of addresses holding between 0 to 1,000 tokens either flatlined or decreased.
An instance like this suggests that the small wallets didn’t exactly have the conviction that ADA would be profitable in the short term.
Like the retail cohort, traders in the derivatives market had the viewpoint that ADA would be bearish, as the long/short ratio showed. The long/short ratio is a metric that represents the ratio of long positions to short positions.
A value above 1 indicates that the collective sentiment of traders is bullish. But when the long/short ratio is below 1, it means that traders have a bearish outlook. And that was the case with ADA.
Trapped for the future
For the short term, derivate market participants were not the only ones who believed that ADA would continue consolidating. Ali_charts, a prominent analyst on Twitter also shared the same view.
According to Ali, ADA has only been trapped in the $0.46 to $0.24 for 329 days. And with respect to history, it took about two years for the token to gain over 2,000%. Ali added that, if ADA was to replicate such, then holders would need to wait longer. He also noted that this could be as far as February 2024.
Irrespective of the drawdown and traders’ sentiment, Cardano had some positives to look at. One of these was its development activity. The development activity measures the public GitHub repositories linked to a project.
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Although the project is not new to dominance with this metric, the hike to 98.12 suggests that developers were committed to perfect working conditions for the Cardano ecosystem.
However, in the last seven days, 1.05 billion ADA has circulated. This implies that there has been an increase in the number of ADA used within the period.