Cardano Faces Bearish Pressure Amid As Chang Closes In. Read CoinChapter.com on Google News
NOIDA (CoinChapter.com)— Cardano (ADA), once hailed as a groundbreaking blockchain project, has recently faced scrutiny and skepticism. Labeled by some critics as a “dead project,” Cardano struggles to shed this tag despite its upcoming updates.
The impending update, which aims to enhance scalability and interoperability, aims to revitalize its standing. However, ADA’s recent price action tells a different story. Currently trading at around $0.31, ADA has seen a notable decline from its highs, reflecting waning investor confidence.
Analyzing Holder Behavior: A Bearish Outlook
Recent data from Messari and Santiment reveal a concerning trend among ADA holders, indicating potential bearish implications for the cryptocurrency.
Active supply for ADA over different time frames. Source: Messari
Messari’s analysis shows an increase in the 10-year active supply from 31 billion ADA in March 2024 to 31.2 billion ADA by July 2024. The surge indicates that long-term holders are now moving their assets.
Such movements often precede selling as holders reposition their portfolios. Moreover, the 5-year active supply rose from 30.8 billion ADA to 31.1 billion ADA in the same period, reinforcing the notion of increased market activity among significant stakeholders.
ADA addresses with balances greater than various amounts.
The 4-year and 3-year active supply charts tell a similar story. The 4-year supply rose from 30.7 billion ADA to 31.1 billion ADA, while the 3-year supply, after a period of decline, showed a modest increase to 29.8 billion ADA in July 2024.
These shifts indicate that both mid-term and shorter-term holders are becoming more active, likely in preparation to sell.
ADA supply distribution by balance of addresses. Source: Santiment
Santiment’s data corroborates these findings. The percentage of ADA held by addresses with balances between 100 million to 1 billion ADA remained relatively stable, hovering around 7.3%. The stability among the largest holders could imply a strategic holding pattern, yet the lack of accumulation is telling.
Furthermore, more concerning is the trend among addresses with 10 million to 100 million ADA, which saw a decline to 35.8%, and those with 1 million to 10 million ADA, which dropped to 15.7%. These declines suggest a redistribution of ADA from mid-tier holders, typically a bearish indicator.
ADA Bulls Holding Above EMA Support
ADA bulls are trying to recover from July 22’s 4.5% drop, with the Cardano token registering a minuscule 3% rally. However, bears forced the token to pare all its gains on June 23. Now, the bulls are struggling to ensure ADA price stays above the 20-day (red) and 50-day (purple) EMA support confluence.
ADAUSD daily price chart with RSI. Source: Tradingview
Breaking below the EMA support would force the ADA USD pair to drop to the support near $0.4. Breaching the immediate support level could force the Cardano token to test the support near $0.37 before recovering.
On the other hand, a rally from here would see the token face the 100-day EMA (blue) resistance near $0.45, flipping which would bring the ADA USD pair close to the resistance near $0.49.
The RSI for ADA remained neutral, with a score of 52.12 on the daily charts.
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