The number of profitable Cardano (ADA) transactions has increased over the last 24 hours. According to data tracked by cryptocurrency analytics firm Santiment, the volume of profitable transactions slightly outweighs that of losses.
Launched earlier this week, the Chang hard fork has introduced major governance changes in Cardano’s network.
The ratio of daily transaction volume in profit to loss stands at 1.15, meaning that for each transaction that results in a loss, there are approximately 1.14 transactions that yield a profit. That shows a cautious yet positive sentiment among ADA holders.
Traders seem to be hot on the upgrade. We will see if ADA can keep going higher as the wider market is still under selling pressure.
A Rally?
Temporary profits have returned after a sell-off among whale investors post-Chang hard fork, Cardano’s major network upgrade that went live earlier this month.
Reports indicate that whales sold approximately $326 million worth of ADA shortly following the upgrade, applying downward pressure on the price. ADA hit a low of $0.311 on September 3, down around 7% since the Chang hard fork’s activation, per CoinGecko’s data.
The activity was considered a “sell-the-news” phenomenon, where investors capitalize on the hype surrounding big events but sell off their assets once the event occurs, leading to a decline in price and delaying any potential market breakout.
The sell-off has indeed contributed to Cardano’s ongoing price struggles, with the cryptocurrency facing challenges in gaining upward momentum post-upgrade.
ADA is currently priced at $0.33, up 3% in the last 24 hours. However, the uptick might be short-lived as the Cardano’s price-DAA divergence stands at -30.93%, according to Santiment.
The negative divergence suggests the price is outperforming the growth in active addresses, meaning that the cryptocurrency is potentially overbought.
In addition, the broad market downtrend has affected a majority of cryptocurrencies, with ADA being no exception. ADA reached its year-high of $0.77 in mid-March amid market bullishness but has since fallen.
Meanwhile, Bitcoin (BTC), Ethereum (ETH), as well as other top cryptocurrencies have also entered sharp correction as market frustration has extended. BTC is hovering around $56,500 while ETH is trading below $2,500. Over the past 24 hours, the total crypto market cap has been down almost 2%.
Staking Concerns After Chang Fork
Cardano said that the Chang hard fork would be the start of a transition toward a new era – the Voltaire age where focuses are on a fully decentralized governance model. The goal is to enable ADA holders to participate actively in the network’s decision-making.
Cardano expects the upgrade to enhance the utility of ADA beyond its current use cases, potentially stabilizing its value in the long term. While the vision appears to be promising, the network still faces some concerns related to its staking mechanism post-Chang.
Cardano’s staking mechanism is liquid, meaning that ADA holders can move their staked assets without a locking period. This mechanism allows investors to sell their holdings easily, but it also allegedly raises concerns about potential volatility in the market as large amounts of ADA can be released and sold quickly.
The community also struggles to fully understand the new governance mechanisms and reward systems. Addressing these concerns, Charles Hoskinson, the founder of Cardano clarified that ADA holders would need to choose from three options to withdraw staking rewards.
These options include a vote of no confidence, abstain, or delegate to a Delegated Representative (DRep). Hoskinson also noted that wallets like Lace will automatically choose to abstain if a user selects delegation only.
Cardano’s founder added that the new governance system aims to give ADA holders the flexibility and the ability to exercise their voting power. Users can opt-out if they are dissatisfied with the process or outcomes.
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