Following a week of considerable gains in value, Cardano [ADA] appears to have entered a period of stabilization. During this lull, major investors have taken advantage of the situation to make strategic moves. Will this activity be sufficient to reintroduce volatility to ADA’s market?
Accumulation by Large Cardano Holders!
Over the past seven days, ADA experienced an increase in its value by more than 13%. As a result, approximately 3 million ADA addresses saw their holdings appreciate, comprising more than 72% of all ADA addresses.
Nevertheless, this uptrend has slowed down in recent days, signaling a phase of stabilization. In reality, the token’s price experienced a slight decrease within the last 24 hours.
At the current time, Cardano is being traded at $1.19, with a market capitalization exceeding $41.9 billion, which positions it as the 8th largest cryptocurrency in the market.
While the price volatility of ADA has decreased, large holders have opted to capitalize on the opportunity to amass more tokens. A well-known crypto analyst, Ali Martinez, shared a tweet revealing that Cardano whales had acquired more than 100 million ADA within the past day!
It wasn’t just the whales; general investors also showed an interest in buying Cardano. On the 3rd of December, the buying volume metric soared to 100 and 73, indicating robust purchasing activity.
A reading closer to 100 signifies high buying pressure. However, it’s worth mentioning that the buying sentiment waned in subsequent days as the metric dropped to 6.6 by the 5th of December.
In addition to the increased whale activity, Cardano’s blockchain recently achieved a significant milestone. Hydra, Cardano’s scaling solution, processed over 2 billion transactions in just 4 hours, surpassing the daily transaction volume of the global behemoth Visa.
Could ADA Experience Heightened Volatility Soon?
To determine whether these accomplishments and milestones could impact ADA’s value, CryptoCrypto examined the token’s on-chain metrics.
Our analysis revealed that as ADA’s price remained stagnant, its trading volume underwent a decline, indicating reduced trading activity among investors.
The MVRV ratio of ADA experienced a notable drop, declining to 37%. Additionally, the token’s velocity decreased, suggesting that ADA was being utilized less frequently in transactions within a specific timeframe. These metrics hint at a potential trend reversal in the near future.
Looking at Cardano’s daily chart, it is evident that the token has been moving within the $1 to $1.2 range. The MACD technical indicator displayed a bearish crossover, indicating a potential price decline that might drive ADA towards its support level of $1 before a new bullish phase begins.